MetroPCS tumbles on 2Q subscriber numbers

Shares of MetroPCS Communications Inc. tumbled Thursday after the low-cost wireless carrier posted disappointing subscriber numbers for its second quarter, dragging rival Leap Wireless International Inc. lower as well.

MetroPCS said early Thursday it added about 184,000 net subscribers during the quarter, bringing the total to 4.6 million.

The company said the quarter was seasonally slow but that adding this many subscribers in a challenging economic environment "strongly demonstrates the resiliency of the MetroPCS business model."

Both Leap and MetroPCS offer prepaid wireless service with no required contracts or credit checks.

According to Goldman Sachs analyst Scott Malat, Wall Street had expected MetroPCS to add 194,000 net subscribers. Malat had expected 222,000.

"Gross (additions) were below our expectations and were slightly below consensus, even in a weak seasonal quarter," the analyst wrote. Rising food and fuel prices and other economic pressures may have limited low-income customers' ability to buy a cell phone costing $80 or more, he added.

But the analyst noted that the quarter's churn, or subscriber turnover rate, was lower than expected. And he said a weakness in MetroPCS' shares provides investors an "attractive entry point for a high-growth company given recent market launches in L.A., Las Vegas and Philadelphia as well as upcoming launches of Boston and New York."

Shares of Richardson, Texas-based MetroPCS fell $2.07, or 12 percent, to $15.11 Thursday. The stock has traded in a 52-week range of $13.68 and $40.87.

Shares of San Diego-based Leap fell $4.25, or 10.5 percent, to $36.42. The stock has traded between $29.87 and $99.04 in the past year.