Smart phones, LTE weigh on MetroPCS' Q4 results

Following up in its limited fourth quarter performance announcement earlier this year, MetroPCS Communications Inc. (PCS) this morning reported financial details for the quarter and full year highlighting the impact of its smart phone and LTE plans.
Despite previously announced customer growth that fell short of 2009 results, MetroPCS reported a 14% increase in total revenues during the fourth quarter, swelling from $930 million in 2009 to $1.065 billion last year. That growth was helped by an increase in its overall customer base year-over-year that offset a drop in average revenue per user, which dropped from $40.70 in 2009 to $39.79 during the fourth quarter of 2010.
Full-year revenues increased nearly 17% from $3.481 billion during 2009 to $4.069 billion last year, again despite a drop in full-year ARPU from $40.68 in 2009 to $39.79.
MetroPCS attributed the drop in ARPU to the roll out of its “Wireless For All” rate plans that included taxes and regulatory fees in their fixed-rate pricing.
While revenues were up, expenses during the fourth quarter followed suit as the carrier saw increased adoption of smart phones that required higher subsidies as well as expenses related to its LTE roll out. These increased expenses were shown by its cash cost per user surging from $138.36 during the fourth quarter of 2009 to $161.88 in 2010, while the cash cost per user inched up from $18.06 in 2009 to $18.83 during the final three months of 2010.
For the quarter, net income declined from $42.2 million in 2009, a return of 9 cents per share, to $22.4 million in 2010, a return of 4 cents per share. For the full year, net income increased from $198 million in 2009, a return of 49 cents per share, to $203.3 million last year, a return of 54 cents per share.
MetroPCS reported last month that customer growth slowed year-over-year from more than 317,000 customers added during the fourth quarter of 2009 to just under 298,000 customers added in 2010. The drop looked to be mostly due to a decline in gross customer additions as the carrier’s customer churn results improved dramatically year-over-year from 5.3% to 3.5%.