For Immediate Release
Chicago, IL – August 7, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: MetroPCS Communications Inc. (PCS), Leap Wireless International Inc. (LEAP), Sprint Nextel (S), America Movil S.A. (AMX) and Dean Foods (DF).
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Here are highlights from Thursday’s Analyst Blog:
MetroPCS Underperforms
MetroPCS Communications Inc.’s (PCS) second quarter results missed Zacks Estimates. Total revenues of $859.6 million were an improvement of 26.6%, compared to the same quarter of the previous year but below Zacks Estimates of $862 million. On a GAAP basis, net income in the second quarter was $26.2 million, a decrease of 48% year over year. EPS for the quarter was $0.07, compared to $0.14 in the prior-year quarter. This was also below the Zacks Consensus Estimate of $0.12.
Operating expense, in the second quarter was $743.8 million, up 37% year over year. Income from operation, in the same quarter was $115.8 million, down 14.6% year over year. Segment wise, Service revenue was $766.9 million in the second quarter, up 28% year over year. Equipment revenue was $92.8 million in the same quarter, up 15.6% year over year. Consolidated adjusted EBITDA was $234 million in the reported quarter, up 11% year over year.
Consolidated net subscriber addition during the second quarter was 205,585, compared to 183,530 in the year-ago quarter and 684,000 in the previous quarter. Out of 205,585 net additional subscribers, 12,645 were added in the core markets and the rest 192,940 were added in the Northeast markets. Consolidated penetration of covered POPs in the quarter was 7.2%, compared to 8.1% in the prior-year quarter.
The low-cost prepaid wireless communications market in the U.S. is highly competitive. Besides MetroPCS, other formidable players in this sector include Leap Wireless International Inc. (LEAP), Boost Mobile, a division of Sprint Nextel (S), and Tracfone Wireless, a division of America Movil S.A. (AMX). Almost all the competitors have either reduced their offer price or added several innovative features into their existing service plans. During the quarter, monthly average churn rate, a measure of customer attrition rose significantly for MetroPCS. Churn rate in the quarter was 5.8%, significantly higher, compared to just 4.5% in the prior year quarter. As a result, Average Revenue per User (ARPU) in the quarter was $40.52 compared to $42.05 in the year-ago quarter.
Dean Foods Beats Marginally
Following the earnings release, Dean Foods (DF) management raised its guidance for fiscal 2009. Annual earnings are now expected to be at least $1.60 per share, roughly 20% above year-ago levels. Previous guidance was $1.55 per share.
Although commodity costs continue to be favorable, management is concerned about the continued competitive activity in fluid milk operations and is cautious regarding diminished commodity favorability in the future. Earnings for the third quarter are expected to be $0.30 per share.
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