MetroPCS (NASDAQ: PCS) notched strong subscriber growth and better-than-expected revenue in its first quarter, offsetting a drop in profit. The flat-rate carrier said it remains on track to launch a prepaid LTE service in select markets in the second half of the year, but was mum on pricing details.
Despite the positive results, the company reported a 21 percent drop in net income, down to $22.7 million from $44 million in the year-ago period, as it was hit by a 30 percent jump in operating costs.
Investors seemed pleased, nonetheless, as the carrier's stock rose by more than 11 percent following the news to around $8.55 per share.
Here's a breakdown of MetroPCS' key quarterly metrics:
Subscribers: MetroPCS had 692,000 total net subscriber additions in the quarter, up from 684,000 in the year-ago period. The company swung back to strong subscriber growth after reporting weaker numbers in the second half of the year; the carrier had 66,000 net additions in the third quarter and 317,000 in the fourth quarter. MetroPCS ended the quarter with 7.33 million total subscribers, up 21 percent from a year ago. The operator touted its revamped unlimited plans, which it launched in January, as key to its success in the quarter.
The flat-rate carrier's new base plan is $40 per month, and offers unlimited voice, texting and Web access. MetroPCS also has plans for $45, $50 and $60 (as well as a $50 smartphone plan), which add services as subscribers go up the price ladder. However, with Sprint Nextel's (NYSE: S) newly unveiled plans to relaunch the Virgin Mobile brand as well as a new brand focused on the pay-per-minute market, MetroPCS is likely to come under increased pressure.
Revenue: Total revenue for the quarter clocked in at $971 million, up 22 percent from $795 million in the year-ago period. Service revenue totalled $853 million, up 17 percent from $727 million in the first quarter of 2009.
Churn: Churn dipped to 3.7 percent, down from 5 percent in the year-ago quarter.
ARPU: Average revenue per user was $39.83 in the quarter, down from $40.40 in the year-ago period and $40.70 in the fourth quarter.
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