MetroPCS added fewer subscribers and phone subsidies increased its operating costs. Net income fell by more than half to $21 million and that translated to a mere $0.06 in earnings per share, but revenue did rise 7% to about $1.27 billion for the quarter. We had a Thomson Reuters consensus target of $0.17 EPS and $1.29 billion in sales. That is a poor showing on earnings even if revenue was only a miss worth a footnote. The subscriber additions of just over 131,000 gave MetroPCS 9.4 million subscribers at the end of the quarter, but that was only about half of the add-on subscribers expected. MetroPCS offers no iPhone. Can you imagine a no-contract or prepaid iPhone? Maybe overseas, but not so much here in America.
Leap Wireless posted a wider loss than expected at -$1.28 EPS and its revenue was only up 6% to $825.6 million. Thomson Reuters had estimates of -$0.98 EPS and about $831.7 million in sales. Leap added about 258,000 subscribers in the quarter rather than about 280,000 to 290,000 expected. Leap is facing higher churn and a slower gain in the average revenue per user.
Leap Wireless shares are down a whopping 23% at $5.90 against a 52-week range of $5.50 to $17.66; MetroPCS shares are down almost 12% at $7.00 at a new 52-week low as the prior 52-week range was $7.51 to $18.79.
JON C. OGG
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