Ahead of its planned combination with T-Mobile, discount wireless provider MetroPCS Communications (PCS) revealed a 65% tumble in fourth-quarter profits on Tuesday amid mounting subscriber losses.
Shares of MetroPCS ticked lower Tuesday morning following the results. The company also set a special shareholder meeting on March 28 to vote on the T-Mobile deal, which has been criticized by some major shareholders.
The company said it earned $32 million, or 9 cents a share, last quarter, compared with a profit of $91 million, or 25 cents a share, a year earlier.
Excluding one-time items, MetroPCS said it earned 11 cents a share, matching the Street’s view.
Revenue rose 3.7% to $1.28 billion, also in line with estimates from analysts. Operating margins tumbled to 9.5% from 17.4% as operating expenses jumped 14%.
As was previously announced, MetroPCS suffered a net subscriber loss of 93,237 in the fourth quarter. A year earlier the company enjoyed a gain of 197,410.
“The fourth quarter continues our transformation as a company to 4G LTE For All,” MetroPCS CEO Roger Linquist said in a statement.
MetroPCS also filed proxy materials on Tuesday, setting a special meeting of shareholders for March 28 to consider the T-Mobile transaction, which was first unveiled in October.
Management at MetroPCS urged shareholders to approve the transaction, which is projected to close in early April.
However, it’s not yet clear if the transaction will be approved by shareholders. Earlier this month large MetroPCS investors Paulson & Co. and P. Schoenfeld Asset Management criticized the T-Mobile deal.
Under the terms of the reverse merger deal, MetroPCS will declare a 1-for-2 reverse stock split and shareholders will receive $1.5 billion in cash.
“We believe that the combined company will have the expanded scale, spectrum and financial resources to compete aggressively with the other larger U.S. wireless carriers," Linquist said.
Shares of MetroPCS slipped 0.2% to $9.74 Tuesday morning, leaving them down 2% so far this year.