Monday, Virgin Mobile USA, Inc. (VM) reported a surge in profit for the second quarter, despite a decline in revenue, benefiting from lower operating expenses.
Total comprehensive income attributable to the company for the second quarter was $17.22 million or $0.23 per share, compared to $5.27 million or $0.07 per share in the previous year.
After adjusting for amortization and transition and restructuring expenses, earnings per share increased to $0.27 from $0.08 last year.
The company noted that earnings for the quarter benefited from planned cost efficiencies in the business, including improved per unit network costs.
Total operating revenue for the quarter declined to $307.56 million from $319.86 million a year ago.
Net service revenue declined to $289.96 million from $293.82 million last year, impacted by customer optimization as customers migrated to lower priced plans. Net service revenue in the quarter was also impacted by the ongoing consumer shift from minutes to messaging, which was offset by growth in data revenue. Net equipment and other revenue was $17.60 million, down from $26.04 million a year ago.
Average revenue per user for the second quarter of 2009 was $18.98, down 3% from $19.49 in the second quarter of 2008. Average monthly customer turnover, for the three months ended June 30, 2009 was 5.3%, a 30 basis point improvement over the same period in 2008.
Total operating expenses for the quarter declined to $276.67 million from $299.88 million last year. Cost of equipment for the quarter was $77.72 million, down from $99.75 million last year. Selling, general and administrative expenses declined to $97.22 million from $106.42 million in the previous year. Net interest expense in the second quarter of 2009 was $5.1 million, down 35% from $7.9 million in the second quarter of 2008.
Virgin Mobile USA's cost per gross addition for the second quarter of 2009 was $113.65, compared to $113.38 in the second quarter of 2008. Cash cost per user for the second quarter of 2009 was $12.12, compared to $11.87 in the second quarter of 2008.
For the six-month period, income attributable to the company increased to $30.68 million or $0.42 per share from $7.76 million or $0.16 per share in the same period of the previous year. Total operating revenue for the period declined to $644.85 million from $649.88 million last year.
VM is currently trading at $4.78, down 0.09 or 1.65%, on a volume of 207 thousand shares on the NYSE.
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