MetroPCS Communications Inc (NYSE:PCS) reported Tuesday a more than double net profit for the third quarter, than it recorded a year ago. The cellular network posted a net profit of $193 million against the $69 million profit it recorded a year ago. Revenue for the quarter was up by 4 percent year over year to $1.26 billion, which beats the analyst estimates of $1.25 billion.
The fifth largest cellular network in the U.S, lost 312,000 subscribers during the quarter, reducing its total subscriber base to 8.9 million customers, however, 1 million of those upgraded to its high-speed LTE network. The company’s costs per gross addition rose 4.1 percent in the most-recent quarter from a year earlier, and its cost per user fell 6 percent. Operating margin rose to 23.2 percent from 14.7 percent. The company’s churn rate, or customer turnover rate, was down to 3.7 percent, compared with 4.5 percent a year ago and 3.4 percent in the prior quarter, driven by the company’s investments in its network and lower year-to-date subscriber growth.
MetroPCS Communications Inc (NYSE:PCS), which offers flat-rate wireless services without annual contracts, experienced robust revenues in the recent quarters, as launching a 4G network and offering smartphones helped to attract new customers. At the same time, its higher promotional handset costs have adversely affected its bottom line.
MetroPCS Communications Inc (NYSE:PCS) CEO Roger Linquist said in a statement, “Late in the third quarter, we launched 4G LTE For All and while still early, we are pleased with initial results, including customer upgrades and churn. As we enter the fourth quarter, our 4G LTE For All efforts are in full-swing, and with over one million 4G LTE subscribers at the end of the third quarter, we believe we are well positioned to meet the current demands for high-speed wireless broadband service. During the fourth quarter, we plan to focus on re-energizing subscriber growth, which we expect will put incremental pressure on our CPGA and CPU. With a robust 4G LTE handset line-up that is growing, we believe our 4G LTE for All initiative provides unmatched value, with all taxes and regulatory fees included”.
In a deal structured as a reverse merger, MetroPCS Communications Inc (NYSE:PCS) agreed this month to merge with Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE)’s U.S. subsidiary, T-Mobile USA. As per the deal, Deutsche Telekom shareholders will own 74 percent of the combined company, while MetroPCS Communications Inc (NYSE:PCS) shareholders will own the rest and be paid $1.5 billion in cash. The cellular network also reaffirmed its outlook for fiscal year 2012.