MetroPCS Communications Inc., which sells low-cost phone service mainly in cities, said Tuesday that it added a record number of subscribers in the first quarter, exceeding analyst expectations.
The Dallas-based company added 725,945 subscribers in the first three months of the year, compared with analyst expectations of about 440,000. In the same quarter a year ago, it added 691,602.
MetroPCS ended the first quarter with 8.9 million subscribers, or about one-tenth as many as AT&T Inc. Yet it added more subscribers in the quarter than AT&T, when excluding certain low-paying devices such as Amazon.com Inc.'s Kindles from AT&T's figures.
The company's shares increased $1.39, or 8.4 percent, to $17.87 in morning trading Tuesday, setting a new two-year high.
MetroPCS earned $56.4 million, or 15 cents per share, more than double the $22.7 million, or 6 cents per share, a year earlier.
The earnings increase was driven both by subscriber gains and by higher monthly fees. Analysts were expecting an even bigger jump -- to 20 cents per share, as polled by FactSet. Analyst Craig Moffett at Sanford Bernstein said the shortfall was likely due to the high number of new subscribers, which brings costs in the form of phone subsidies.
Revenue increased 23 percent to $1.19 billion from $971 million. Analysts were on average expecting revenue of $1.13 billion.
MetroPCS sells phones and monthly service plans on so-called "prepaid" terms, without contracts. Its average monthly revenue per user was $40.42, up from $39.83 a year ago.
The percentage of subscribers cancelling service every month, or the "churn," was 3.1 percent, a record low for the company. In 2009, the figure was above 5 percent.