MetroPCS Communications Inc., a provider of low-cost wireless service, reported 5.5 percent profit growth for the second quarter but missed Wall Street's expectations.
Its shares tumbled $3.68, or 23 percent, to $12.50 in morning trading.
The company said its net income rose to $84.3 million, or 23 cents per share, up from $79.9 million, or 22 cents per share, in the same period a year earlier. Revenue rose 19 percent to $1.21 billion from $1.01 billion.
But analysts, on average, were expecting earnings of 28 cents per share on revenue of $1.22 billion, according to a poll by FactSet.
Dallas-based MetroPCS added about 200,000 net subscribers during the quarter, growing its overall base by 19 percent from a year earlier. It finished the second quarter with about 9.1 million subscribers. The company said the second quarter is a "seasonally slow" period. In the first quarter of this year, it added 725,945 subscribers, more than what analysts had been expecting.
The company's "churn," or average monthly subscriber turnover rate, was 3.9 percent, higher than the 3.3 percent it recorded a year ago. MetroPCS provides prepaid, flat-rate wireless service plans with no required contract or credit checks. It operates mainly in cities.