MetroPCS' Profit Jumps 82%; Sees Opportunity in 'Economic Slowdown'

Discount wireless provider MetroPCS Communications Inc. reported an 82% rise in Q3 profit on a 41% increase in total revenue. Net income was $53.1 million, good for EPS of $0.15, versus net of $29.3 million (EPS of $0.08) a year ago. Total revenue was $557 million, while quarterly service revenue increased 47% to $489 million. Consensus analyst estimates were for EPS of $0.13 on total revenue of $562 million. The company projects net subscriber additions of between 1.25 million and 1.52 million in Q4; it added 114,000 net customers in the recent quarter, which is traditionally the company's weakest. MetroPCS believes it is well positioned for an economic downturn: "economic slowdowns facilitate an increase in our market penetration rates as consumers look for compelling value propositions. With no subscriber bad debt exposure and a low cost structure, MetroPCS is well positioned in a difficult economy to continue its aggressive customer acquisition." Shares fell sharply earlier this month after the company withdrew its bid for competitor LEAP Wireless (full summary). PCS shares closed higher by 5.38% in composite trading Tuesday.

Sources: Press release, MarketWatch
Commentary: MetroPCS Withdraws Leap Wireless Bid; Both Companies Tank • Leap Wireless Rejects MetroPCS Bid • Metro PCS Communications: The Bull Case
Stocks/ETFs to watch: PCS. Competitors: LEAP, T, VZ, S. ETFs: PTE, WMH

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