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MetroPCS Communications Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 3, 2011 12:22PM

MetroPCS Communications Inc. (PCS) filed Quarterly Report for the period ended 2011-06-30. Metropcs Communications has a market cap of $3.68 billion; its shares were traded at around $10.26 with a P/E ratio of 12.8 and P/S ratio of 0.9. Metropcs Communications had an annual average earning growth of 10.4% over the past 5 years.



Highlight of Business Operations:

Cost of Equipment. Cost of equipment increased $107.1 million, or approximately 46%, to $342.5 million for the three months ended June 30, 2011 from approximately $235.4 million for the three months ended June 30, 2010. The increase is primarily attributable to an increase in handset upgrades by existing customers and an increase in gross customer additions which led to an approximately $70.6 million increase, as well as a higher average cost of handsets accounting for an approximately $36.8 million increase.

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased $4.0 million, or approximately 3%, to approximately $154.6 million for the three months ended June 30, 2011 from $158.6 million for the three months ended June 30, 2010. Selling expenses decreased by approximately $7.7 million, or approximately 9%, for the three months ended June 30, 2011 compared to the three months ended June 30, 2010. The decrease in selling expenses is primarily attributable to an approximate $9.2 million decrease in marketing and advertising expenses, partially offset by an approximate $1.6 million increase in employee related costs to support our growth. General and administrative expenses increased approximately $4.8 million, or approximately 8%, for the three months ended June 30, 2011 as compared to the three months ended June 30, 2010, primarily due to the growth in our business.

Interest Expense. Interest expense increased approximately $1.5 million, or 2%, to approximately $67.0 million for the three months ended June 30, 2011 from $65.5 million for the three months ended June 30, 2010. The increase in interest expense was primarily attributable to an approximate $11.2 million increase in interest expense on the senior secured credit facility, as amended, as a result of the issuance of a new tranche of term loans in the amount of $500.0 million, or Tranche B-3 Term Loans, in March 2011 as well as an additional $1.0 billion of Tranche B-3 Term Loans, or the Incremental Tranche B-3 Term Loans, in May 2011. This increase in interest expense was partially offset by a decrease due to the repayment of approximately $535.8 million of existing tranche B-1 term loans, or Tranche B-1 Term Loans, in May 2011 coupled with a decrease of $8.8 million in interest expense on senior notes as a result of the redemption of our 9 1/4% senior notes due 2014, or 9 1/4% Senior Notes, in late 2010 and the issuance of new senior notes at a lower rate of interest. Our weighted average interest

Cost of Equipment. Cost of equipment increased $202.7 million, or approximately 37%, to approximately $751.8 million for the six months ended June 30, 2011 from approximately $549.1 million for the six months ended June 30, 2010. The increase is primarily attributable to an increase in handset upgrades by existing customers and an increase in gross customer additions which led to an approximately $128.4 million increase, as well as a higher average cost of handsets accounting for an approximately $75.2 million increase.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $5.8 million, or approximately 2%, to $324.3 million for the six months ended June 30, 2011 from $318.5 million for the six months ended June 30, 2010. Selling expenses decreased by approximately $5.0 million, or approximately 3%, for the six months ended June 30, 2011 compared to the six months ended June 30, 2010. The decrease in selling expenses is primarily attributable to an approximate $7.4 million decrease in marketing and advertising expenses, partially offset by an approximate $2.9 million increase in employee related costs to support our growth. General and administrative expenses increased approximately $11.9 million, or approximately 10%, for the six months ended June 30, 2011 as compared to the six months ended June 30, 2010, primarily due to the growth in our business.

Interest Expense. Interest expense decreased approximately $9.5 million, or 7%, to $123.5 million for the six months ended June 30, 2011 from approximately $133.0 million for the six months ended June 30, 2010. The decrease in interest expense was primarily attributable to an approximate $17.7 million decrease in interest expense on senior notes as a result of the redemption of the 9 1/4% Senior Notes in late 2010 and the issuance of new senior notes at a lower rate of interest. This decrease was partially offset by a $9.5 million increase in interest expense on the senior secured credit facility, as amended, as a result of the issuance of the Tranche B-3 Term Loans in March 2011 as well as the Incremental Tranche B-3 Term Loans in May 2011, partially offset by lower interest expense due to the repayment of approximately $535.8 million of Tranche B-1 Term Loans in May 2011. Our weighted average interest rate decreased to 6.14% for the six months ended June 30, 2011 compared to 7.57% for the six months ended June 30, 2010. Average debt outstanding for the six months ended June 30, 2011 and 2010 was approximately $3.9 billion and $3.5 billion, respectively.

Read the The complete Report



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