MetroPCS Communications Inc. ( PCS ) reported
first-quarter 2013 adjusted earnings per share of 6 cents, failing
to meet the Zacks Consensus Estimate of 11 cents, hurt by a weak
business in the service unit along with higher operating expenses.
The results remained unchanged from the year-ago quarter.CISCO SYSTEMS (CSCO): Free Stock Analysis
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Total revenue remained nearly flat year over year at $1,287.1
million in the first quarter, and surpassed our expectation of
$1,281.0 million. The well performing equipment segment supported
Adjusted EBITDA increased 10.9% year over year to $291.1 million.
The company generated EBITDA margin (adjusted EBITDA as a
percentage of service revenues) of 26.4% that improved 380 basis
In the first quarter, average revenue per user (ARPU) was $40.96
compared with $40.56 in the year-ago quarter. Cost per user (CPU)
decreased 2.9% year over year to $22.21.
Cost per gross addition (CPGA) remained at the same level as the
prior-year quarter at $236.14. Churn (customer switch) was 2.9%,
down 20 bps from first quarter 2012.
As of Mar 31, 2013, the total subscriber base comprised 8.99
million customers (down 5.0% year over year). During the quarter,
the company added 108,668 subscribers, which was less than 131,654
added in the prior-year period. Consolidated penetration of the
covered population was 8.7%, down from 9.3% in first quarter
MetroPCS ended the first quarter with cash and cash equivalents
(inclusive of short-term investment) of $2,701.3 million compared
with $2,613.3 million in a year-ago quarter. Long-term debt was
$5,807.2 million compared with $4,724.1 million in the year-earlier
For fiscal 2013, MetroPCS expects capital expenditures of $800
million to $900 million.
We believe that MetroPCS - which has business tie-ups with
Cisco Systems Inc. ( CSCO ) - stands to
benefit from the boost in spectrum capacity and influx of
significant infrastructural investments. High demand for wireless
data and the incorporation of VoLTE will also help the company's
Additionally, the company has finally received a favorable ruling
by the Committee on Foreign Investment in the United States
regarding its merger with T-Mobile USA.
This deal is expected to result in accelerated financial growth
with estimated five-year CAGR for revenues, EBITDA and free cash
flow in the range of 3-5%, 7-10% and 15-20%, respectively. Apart
from financial benefits, the merger between MetroPCS and T-Mobile
would boost the company's operations in the U.S. and safeguard its
market share against bigger players like AT&T
Inc. ( T )
and Verizon Communications Inc. ( VZ ).
MetroPCS has a Zacks Rank #3 (Hold).