MetroPCS subscriber numbers disappoint
(Reuters) - MetroPCS PCS.N reported fourth-quarter net subscriber growth that missed analyst expectations even as it posted a smaller-than-expected customer cancellation rate.
MetroPCS, a provider of wireless services to cost-conscious consumers, said it added 197,000 subscribers in the quarter on a net basis, compared with expectations ranging from 214,000 to 250,000 net additions from three analysts' research notes.
However, churn, a measure of customer attrition, was 3.7 percent for the period. This was worse than 3.5 percent in the year-ago period but well ahead of expectations for 3.95 percent to 4.2 percent from three analysts.
Mizuho analyst Michael Nelson said that despite expectations that were too high for MetroPCS, the company still managed to show decent growth compared with the year-ago quarter.
"It looks like the consumer held up pretty well for wireless in the fourth quarter," Nelson said, referring to MetroPCS, Leap and their bigger rivals Verizon Wireless and AT&T.
The PCS numbers came a day after Leap, another low-cost peer, issued subscriber estimates for the quarter.
Leap said it added about 175,000 customers in the fourth quarter compared with expectations ranging from almost 115,000 to 195,000 from three analysts' research notes.
Verizon Wireless, a venture of Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L), boasted of strong sales of the Apple Inc (AAPL.O) iPhone and other advanced devices in the fourth quarter at a conference on Wednesday afternoon.
AT&T had said in early December that it had already sold 6 million smartphones in the first two months of the fourth quarter, similar to its sales for the entire fourth quarter the year before.
MetroPCS said it ended the quarter with more than 9.3 million subscribers with a 7 percent increase in gross additions, the company said.
On a sequential basis, PCS quarterly churn fell by 80 basis points, as it said improved network performance and seasonal demand helped the company hold on to customers.
MetroPCS shares fell 73 cents to $8.07 on the New York Stock Exchange where Verizon shares slid 0.6 percent to $38.96. Leap shares were down 67 cents, or 7.1 percent, at $8.53 on Nasdaq.