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TracFone Sees Q3 Revenue, Earnings Gains

10/25/2013 10:37:00 AM Eastern

Miami — No-contract cellular MVNO TracFone Wireless posted double-digit percentage gains in revenue and high single-digit earnings growth on a slight gain in the number of net new subscriber.

Revenues grew in the third quarter by 17.2 percent to $1.5 billion and in the first nine months of the fiscal year by 30.7 percent to $4.5 billion.

The revenue growth rate “has normalized,” the company said, pointing out that during the past four quarters, growth was driven up by the purchase of MVNO Simple Mobile in late June 2012. “This time around, the quarter’s revenue growth is completely organic,” the company said.

Earnings before interest, taxes, depreciation and amortization (EBITDA) grew 8.2 percent to $205 million for the quarter but were down for the nine-month period by 8.6 percent to $429 million.

The number of net new subscribers hit 5,000 after disconnecting an unspecified number of subscribers “resulting from the revaluation of the conditions of certain commercial plans,” the company said.

Though meager, the third-quarter net subscriber gain reverses a loss of around 200,000 subscribers in the second quarter, when the company said it disconnected 192,000 accounts “as a consequence of changes of the commercial conditions of certain plans.”

At the end of the third quarter, the subscriber base was 23.04 million, up 6.5 percent from a year-ago 21.64 million.

Data revenues rose 50 percent in the quarter compared with the year-ago period and represented 42.5 percent of TracFone’s $1.37 billion in service revenues. Voice revenues are growing “roughly in line with subscriber growth,” the company said.

The company is owned by Mexico-based telecommunications company America Movil, which did not break out TracFone’s net profit.

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