MetroPCS Communications Inc.
) reported fourth-quarter 2012 earnings per share of 9 cents,
failing to meet the Zacks Consensus Estimate of 13 cents and
decreasing 43.8% from 25 cents in the year-ago quarter. The
results were hurt by a weak performance by the service unit along
with high operating expenses.
Total revenue climbed 3.7% year over year to $1,284.3 million in
the fourth quarter, beating our expectation of $1,274.0 million.
The outperformance was supported by a solid contribution from the
For full-year 2012, MetroPCS posted earnings per share of $1.07
(lagging our projection of $1.12 but up 30.5% year over year), on
revenues of $5,101.3 million (up 5.2% from the last year).
Adjusted EBITDA dropped 15.2% year over year to $307 million. The
company generated EBITDA margin (adjusted EBITDA as a percentage
of service revenues) of 27.9% that deteriorated 400 basis points
In the fourth quarter, average revenue per user (ARPU) was $40.86
compared with $40.55 in the year-ago quarter. Cost per user (CPU)
increased 9.5% year over year to $21.91.
Cost per gross addition (CPGA) crept up 37.5% from the prior-year
quarter to $228.04. Churn (customer switch) was 3.6%, down 10 bps
from fourth quarter 2011.
As of Dec 31, 2012, total subscriber base was 8.88 million
customers (down 4.9% year over year). During 2012, the company
lost 459,936 subscribers against subscriber addition of 1,191,549
in the prior year. Consolidated penetration of the covered
population was 8.6%, down from 9.3% in 2011.
MetroPCS ended 2012 with cash and cash equivalents (inclusive of
short-term investment) of $2,613.3 million compared with $2,243.2
million a year ago. Long-term debt was $4,724.1 million compared
with $4,711.0 million last year
For fiscal 2013, MetroPCS expects capital expenditures in the
range of $800 million to $900 million.
We believe that MetroPCS stands to benefit from the successful
launch and execution of Wireless for All, growing demand for
) Android-based smartphones and the recently introduced 4G Long
Term Evolution for All program.
Additionally, if the company's impending merger with T-Mobile
USA eventually materializes, it would remain accretive to its
financials as well as market expansion, in particular in the 4G
space by boosting spectrum capacity and by the influx of
significant infrastructural investments.
GOOGLE INC-CL A (GOOG): Free Stock Analysis
METROPCS COMMUN (PCS): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
To read this article on Zacks.com click here.
However, MetroPCS operates in an intensely competitive domestic
low-cost prepaid wireless market. The company's operations are
increasingly challenged by the aggressive rollout of competitive
price plans by some of its larger players such as
MetroPCS has a Zacks Rank #3 (Hold).