NTELOS Holdings Corp. (NTLS, Financial) filed Quarterly Report for the period ended 2010-03-31.
Ntelos Holdings Corp. has a market cap of $834.8 million; its shares were traded at around $20.1 with a P/E ratio of 13.5 and P/S ratio of 1.5. The dividend yield of Ntelos Holdings Corp. stocks is 5.6%.NTLS is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Operating revenues decreased $3.1 million, or 2.2%, from the three months ended March 31, 2009 to the three months ended March 31, 2010 primarily due to a decrease in wireless PCS revenues of $5.2 million, or 4.7%, primarily from declines in subscriber revenues and wholesale revenues. Wireline revenues increased $2.0 million over the comparative three months due to growth in key strategic product revenues in the Competitive Wireline segment, including revenues associated with the fiber optic assets acquired from Allegheny Energy, Inc. as of December 31, 2009. These increases were partially offset by a decline in revenue from the RLEC segment.
Net income attributable to NTELOS Holdings Corp. decreased $4.9 million, or 28.1%, from the first three months of 2009. In addition to the $2.3 million decrease in operating income, other expenses (net of other income), increased by $5.7 million primarily relating to a $4.8 million increase in interest expense and the prior year favorable change in interest rate swap value of $0.9 million. These decreases to net income were offset by a $3.1 million decrease in income tax expense.
Subscriber revenues reflected net subscriber growth of approximately 800 subscribers, less than 1%, from approximately 444,500 subscribers as of March 31, 2009 to approximately 445,300 subscribers as of March 31, 2010. Following the net decrease in customers from the end of the first quarter 2009 to year end 2009, we added approximately 6,700 net customers during the first quarter of 2010. However, a shift to a higher mix of prepaid as compared to postpay gross subscriber additions and churn and downward ARPU pressure with certain prepaid products reduced subscriber revenue growth. Data revenue increased $2.1 million, but was more than offset by a decline in voice revenues brought about by competitive pricing reductions and economic conditions which contributed to subscribers changing to or purchasing lower priced plans, the mix shift noted above and an increase in the number of prepay subscribers who suspend service for a period of time. Underlying the 24.9% growth in data revenue was the technology upgrade to EV-DO and an increased sales emphasis on smart phones and other data-centric handsets coupled with a broader array of data packages and increased sales of data cards. Total data ARPU for all prepay and postpay products was $10.83 for the three months ended March 31, 2010 compared to $8.78 for the three months ended March 31, 2009, an increase of 23.3%, reflecting the increased take-rate on data packages and increased usage rates.
The decrease in wholesale and roaming revenue was driven by a $1.8 million, or 6.1%, decrease in revenue from the Strategic Network Alliance. Roaming revenues from other carriers were flat from the comparative three months. The revenue decrease from the Strategic Network Alliance is reflective of data usage which was billable at substantially higher contractual preset rates in 2009 up until the July 1, 2009 contractual travel data rate reset. Following the travel data rate reset, our monthly calculated revenue from Sprint Nextel was below the $9.0 million minimum and thus we billed and recognized revenue at the $9.0 million minimum stipulated in the contract in the
first three months of 2010. Revenue from this contract is projected to remain at the $9.0 million monthly minimum throughout 2010. Accordingly, due to the first half of 2009 wholesale revenues being above the $9.0 million minimum per month, we would expect a decline of approximately $4.8 million in 2010 if wholesale revenue remains at the $9.0 million per month minimum as expected for the six months ended June 30, 2010 and the year as compared to the prior year comparable periods. Also, roaming revenues from other carriers may decline in 2010 as a result of industry consolidation of carriers with complementary networks or from other roaming arrangements which may not be favorable to us.
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Ntelos Holdings Corp. has a market cap of $834.8 million; its shares were traded at around $20.1 with a P/E ratio of 13.5 and P/S ratio of 1.5. The dividend yield of Ntelos Holdings Corp. stocks is 5.6%.NTLS is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
We have an agreement with Sprint Spectrum L.P. to act as their exclusive wholesale provider of network services through July 31, 2015. Under this arrangement, which we refer to as the Strategic Network Alliance, we are the exclusive PCS service provider in our western Virginia and West Virginia service area to Sprint for all Sprint CDMA wireless customers. For the three months ended March 31, 2010 and 2009, we realized wireless wholesale revenues of $28.3 million and $30.1 million, respectively. Of this total for the three months ended March 31, 2010 and 2009, $27.1 million and $28.8 million, respectively, related to the Strategic Network Alliance. Following a contractual travel data rate reset on July 1, 2009, our monthly calculated revenue from Sprint Nextel has fallen below the $9.0 million minimum and thus we have been billing and recognizing revenue at the $9.0 million minimum stipulated in the contract since the July 2009 travel data rate reset. Revenue from this contract is projected to remain at that level throughout 2010.Operating revenues decreased $3.1 million, or 2.2%, from the three months ended March 31, 2009 to the three months ended March 31, 2010 primarily due to a decrease in wireless PCS revenues of $5.2 million, or 4.7%, primarily from declines in subscriber revenues and wholesale revenues. Wireline revenues increased $2.0 million over the comparative three months due to growth in key strategic product revenues in the Competitive Wireline segment, including revenues associated with the fiber optic assets acquired from Allegheny Energy, Inc. as of December 31, 2009. These increases were partially offset by a decline in revenue from the RLEC segment.
Net income attributable to NTELOS Holdings Corp. decreased $4.9 million, or 28.1%, from the first three months of 2009. In addition to the $2.3 million decrease in operating income, other expenses (net of other income), increased by $5.7 million primarily relating to a $4.8 million increase in interest expense and the prior year favorable change in interest rate swap value of $0.9 million. These decreases to net income were offset by a $3.1 million decrease in income tax expense.
Subscriber revenues reflected net subscriber growth of approximately 800 subscribers, less than 1%, from approximately 444,500 subscribers as of March 31, 2009 to approximately 445,300 subscribers as of March 31, 2010. Following the net decrease in customers from the end of the first quarter 2009 to year end 2009, we added approximately 6,700 net customers during the first quarter of 2010. However, a shift to a higher mix of prepaid as compared to postpay gross subscriber additions and churn and downward ARPU pressure with certain prepaid products reduced subscriber revenue growth. Data revenue increased $2.1 million, but was more than offset by a decline in voice revenues brought about by competitive pricing reductions and economic conditions which contributed to subscribers changing to or purchasing lower priced plans, the mix shift noted above and an increase in the number of prepay subscribers who suspend service for a period of time. Underlying the 24.9% growth in data revenue was the technology upgrade to EV-DO and an increased sales emphasis on smart phones and other data-centric handsets coupled with a broader array of data packages and increased sales of data cards. Total data ARPU for all prepay and postpay products was $10.83 for the three months ended March 31, 2010 compared to $8.78 for the three months ended March 31, 2009, an increase of 23.3%, reflecting the increased take-rate on data packages and increased usage rates.
The decrease in wholesale and roaming revenue was driven by a $1.8 million, or 6.1%, decrease in revenue from the Strategic Network Alliance. Roaming revenues from other carriers were flat from the comparative three months. The revenue decrease from the Strategic Network Alliance is reflective of data usage which was billable at substantially higher contractual preset rates in 2009 up until the July 1, 2009 contractual travel data rate reset. Following the travel data rate reset, our monthly calculated revenue from Sprint Nextel was below the $9.0 million minimum and thus we billed and recognized revenue at the $9.0 million minimum stipulated in the contract in the
first three months of 2010. Revenue from this contract is projected to remain at the $9.0 million monthly minimum throughout 2010. Accordingly, due to the first half of 2009 wholesale revenues being above the $9.0 million minimum per month, we would expect a decline of approximately $4.8 million in 2010 if wholesale revenue remains at the $9.0 million per month minimum as expected for the six months ended June 30, 2010 and the year as compared to the prior year comparable periods. Also, roaming revenues from other carriers may decline in 2010 as a result of industry consolidation of carriers with complementary networks or from other roaming arrangements which may not be favorable to us.
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