MetroPCS Beats Earnings: Are Consumers Shifting To Prepaid Phones?

The largest pay as you go telecom carrier in the United States, MetroPCS (PCS) Communications Inc., recently reported its third quarter results. Results were impressive as the company more than doubled its bottom line from the same quarter last year. The company posted earnings per share of $0.52 on revenues of $1.26 billion. Both revenues and earnings grew, by 5% and 177%, respectively. The company ended the quarter beating estimates for both revenues and earnings. Third quarter revenues of $1.26 billion beat revenue estimates of $1.25, whereas, PCS beat earnings estimate by a comfortable margin of $0.26. Despite the fact that earnings were helped by a $53 million gain on sale of certain securities, the company would have still beaten the EPS estimates by a margin of $0.19 per share after excluding the effects of the said sale of securities.

The company has recently announced that it will merge its operations with T-Mobile. In our previous report, we mentioned the various operational and financial benefits for the company in the post merger scenario. We believe that in addition to a significant expansion in its customer base, the company will achieve operational scale, wider coverage and wider range of handsets, which will eventually help it bring back customer growth. Read more