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This Wireless Telecom's Earnings Sizzled!

Dan Radovsky
February 23, 2012

MetroPCS (NYSE: PCS  ) shares jumped more than 13% after the company released its fourth-quarter earnings. Year-over-year fourth quarter adjusted EBITDA rising 15% gave the stock its spring. And bringing in earnings per share of $0.25, beating analyst estimates of $0.16, certainly added a boost. That was up from $0.20 a share in quarter four of 2010.

MetroPCS is strictly a prepaid wireless carrier. That is, it offers only month-to-month service and does not sign customers to long-term contracts. The company launched a 4G LTE network this year and began offering smartphones. The combination played its part in bringing in new customers, and the company has managed to reduce its churn rate from 4.5% to 3.7% in the past two quarters. It did that while increasing its net subscribers to 9.35 million, up from 8.16 million a year ago, an increase of 14.6%.

The company did see its operating margin fall from 19.4% in Q4 2010 to 17.4%, but average revenue per user still went go up 1.9%

Interestingly, the company went directly to 4G LTE without ever offering 3G. MetroPCS Chairman and CEO Roger Linquist told FierceWireless editor Sue Marek last October, "[We] knew that 4G was going to be right on the heels of 3G." He also said that he never considered going with the older 4G WiMAX technology that Sprint Nextel (NYSE: S