MetroPCS Surges On Earnings That Beat Analysts Targets

MetroPCS Surges Most Since IPO After Earnings Exceed Estimates  

By Scott Moritz | Bloomberg
MetroPCS Communications Inc. (PCS), a pay- as-you-go wireless carrier, advanced the most since its initial public offering more than five years ago after reporting quarterly profit that beat analysts’ estimates amid a decrease in promotional costs.

MetroPCS surged 37 percent to $8.59 at the close in New York, for the biggest intraday gain since its IPO in April 2007. The shares had declined 28 percent this year through yesterday.Leap Wireless International Inc. (LEAP), a rival pay-as-you-go wireless-service provider, jumped 12 percent to $5.64.


Second-quarter net income rose 76 percent to $148.8 million, or 41 cents a share, from $84.3 million, or 23 cents, a year earlier, the Richardson, Texas-based company said today in a statement. Analysts projected 22 cents, the average of estimates compiled by Bloomberg.


MetroPCS, led by Chairman and Chief Executive Officer Roger Linquist, is cutting sales-promotion costs amid a slowdown in new customers. The company shed 186,000 users in the quarter, its first quarterly customer lost, compared with a gain of 199,000 users a year ago.


Jennifer Fritzsche, an analyst at Well Fargo Securities, projected a loss of 174,000 customers in the quarter. Phil Cusick, an analyst at JPMorgan Chase & Co., called for a loss of 250,000 users.


Adjusted earnings before interest, taxes, depreciation and amortization was $477 million, better than the $363 million estimate compiled by Bloomberg. Sales rose 6 percent to $1.28 billion, beating the average of analysts’ estimates of $1.25 billion, according to data compiled by Bloomberg.

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