Two very similar wireless operators had very different days yesterday. MetroPCS (NYSE:PCS, news, filings) enjoyed some real sunshine, reporting revenues of $930M, adjusted EBITDA of $251M, and earnings per share of $0.09 – all three of which were above analyst estimates. Net customer additions and ARPU were both up.
But just next door, Leap Wireless (NASDAQ:LEAP, news, filings) turned in revenues of $599 and earnings per share of -$0.82. Unfortunately the market had numbers in mind more in the neighborhood of $633M and -$0.65. Both net customer adds and ARPU were down. They also settled the class action suit over the 2007 restatement for a cool $13.75M – as usual, a pittance for shareholders but a nice trip to Tahiti for the lawyers.
Churn remained high for both companies, suggesting that it’s very tough out there. Clearly in Q4 Leap got stepped on a bit competitively, as MetroPCS and Sprint’s Boost moved more aggressively and took some market share. I wonder if the relative performance makes the frequently rumored potential merger between Leap and MetroPCS more or less likely over the next quarter or two. I suspect the likelihood went up some, but things can change quickly on the ground – they might have already, who knows.
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