MetroPCS up with numbers; Blockbuster stronger on revised guidance; GM inches higher; LCDX slides

By Sara Rosenberg

New York, Aug. 7 - MetroPCS Communications Inc.'s term loan was stronger on Thursday following the release of financial results, and Blockbuster Inc. was better as well, being that with the company's earnings news came an upwards revision to full-year guidance.

Also in trading, General Motors Corp.'s term loan was better in light volume and LCDX 10 came under some pressure in sympathy with equities.

MetroPCS' term loan headed higher during the trading session after the company announced second-quarter and six-month numbers, according to a market source.

The term loan was quoted at 95¼ bid, 95¾ offered, up a quarter from previous levels, the source said.

"The PCS results looked good and the equity reports from the sell side seem happy. No wonder the loans are stronger. The question is why the stock dropped after initially going up - don't know," the source remarked.

For the second quarter, the company reported net income of $50 million, or $0.14 per diluted share, as compared to consolidated net income of $58 million, or $0.17 per diluted share, for the same period last year.

The results include an impairment charge of about $9 million related to the company's previous investment in auction-rate securities. On a non-GAAP basis excluding the impairment charge, consolidated net income would have been about $59 million, or $0.17 per common share.

Total revenues for the quarter were $679 million, an increase of 23% from $551 million in the second quarter of 2007.

Income from operations was $136 million, an increase of about 3% from $132 million in the comparable period last year.

And, consolidated adjusted EBITDA was $210 million, compared to $180 million in second quarter 2007.

"We are very pleased to see strong financial and operational results during the seasonally slow second quarter and in the current challenging economic environment. With year-over-year consolidated adjusted EBITDA growth of about 17%, and second quarter net subscriber additions of about 184,000, we are confident that our outlook for 2008 is achievable," said Roger D. Linquist, chairman, president and chief executive officer, in a news release.

For the six months ended June 30, the company reported net income of $90 million, or $0.25 per diluted share, compared to net income of $94 million, or $0.28 per diluted share, in the first six months of 2007.

Total revenues for the six months were $1.341 billion, compared to $1.088 billion last year.

Income from operations was $248 million, compared to $235 million in the comparable period in 2007.

And, consolidated adjusted EBITDA for the six-month period was $388 million, compared to $330 million last year.

For full year 2008, MetroPCS reaffirmed its guidance of net subscriber additions in the range of 1.25 million to 1.52 million on a consolidated basis. Consolidated adjusted EBITDA is expected to be in the range of $750 million to $850 million, which is inclusive of an adjusted EBITDA loss in the range of $125 million to $175 million in the Auction 66 Markets.

MetroPCS is a Richardson, Texas-based provider of wireless communications service for a flat-rate with no signed contract.

Blockbuster trades up

Blockbuster's term loan gained some ground on Thursday as, in conjunction with releasing financial results, the company increased guidance, according to a market source.

The term loan was quoted at 93¼ bid, up from 93 bid on Wednesday, the source said.

"Blockbuster: good EBITDA and no Circuit City overhang. Movie environment looks good, 'Dark Knight,' which helps rentals six months out, but good guidance definitely the major thing," the source explained.

For the second quarter, net loss was $41.9 million, or $0.23 per share, compared with a net loss of $31.4 million, or $0.18 per share, for the second quarter of 2007, which included an $81.3 million gain on asset sale.

Adjusted net loss for the quarter totaled $36.1 million, or $0.20 per share, compared with adjusted net loss of $96.5 million, or $0.52 per share, last year.

Total revenues for the quarter were $1.3 billion, up 3.3% from $1.26 billion in the same period last year.

Gross profit for the second quarter increased $20.4 million to $655.2 million as compared to the second quarter of 2007 and gross margin remained essentially flat at 50.2%.

Adjusted EBITDA for the second quarter was $28.2 million, compared to negative $30 million in 2007. The company said that this improvement reflects the positive impact of strategic initiatives, including the increased availability of top new movies, improved store merchandising, more effective pricing and a lower cost structure.

"Our second-quarter results mark Blockbuster's fourth consecutive quarter of improved same-store sales," said Jim Keyes, chairman and chief executive officer, in a news release. "We are especially pleased with the 14.2% increase in domestic same-store revenues, which includes a 6.5% increase in rental revenues."

For the 26 weeks ended July 6, the company reported net income of $3.5 million, or a loss of $0.01 per share, compared with a net loss of $80.4 million, or $0.45 per share, last year.

Total revenues for the 26 week period were $2.7 billion, compared to $2.74 billion in the comparable period last year.

Gross profit for the 26 weeks was essentially unchanged at about $1.397 billion.

And, adjusted EBITDA for the 26 weeks was $142.7 million, compared to negative $6.7 million last year.

Also on Thursday, the company raised its previously issued guidance for the full-year 2008 to adjusted EBITDA in the range of $300 million to $315 million from adjusted EBITDA in the range of $290 million to $310 million, which corresponds to net income in the range of $21 million to $36 million.

The revised guidance is based on positive trends in the company's underlying business and financial results year to date.

Blockbuster is a Dallas-based provider of in-home movie and game entertainment.

General Motors rises

General Motors' term loan was quoted higher during market hours, although activity in the name was relatively light, according to a trader.

The term loan was quoted at 74¼ bid, 75¼ offered, up from Wednesday's levels of 74 bid, 75 offered, the trader said.

On Thursday, news emerged that General Motors has agreed to increase its advances to Delphi Corp. by up to $300 million, for which Delphi is now seeking court approval.

In May, General Motors had agreed to advance up to $650 million to Delphi to support the company's objective to maintain a minimum of $500 million of liquidity in available funds through the second half of 2008.

However, even with the increase in the advance, Delphi will only be able to maintain a minimum of $300 million of liquidity through the second half of the year.

"Nothing to do with the news," the trader remarked regarding the increase in General Motors' term loan levels. "More of a technical picture."

Delphi's second-lien debtor-in-possession loan was unchanged on the news at 84¼ bid, 85¼ offered, the trader added.

General Motors is a Detroit-based automotive company. Delphi is a Troy, Mich.-based automotive electronics manufacturer.

LCDX dips

LCDX 10 levels softened on Thursday, with the negative momentum attributed to the sell off in equities, according to a trader.

The index was quoted at 97.15 bid, 97.25 offered, down from 97.30 bid, 97.40 offered, the trader said.

Nasdaq closed down 22.64 points, or 0.95%, Dow Jones Industrial Average closed down 224.64 points, or 1.93%, S&P 500 closed down 23.12 points, or 1.79%, and NYSE closed down 163.04 points, or 1.92%.

As for the overall performance in the loan cash market, that saw some differing opinions depending on who was asked.

According to one trader, the cash market was a mixed bag with some names trading up and some names trading down. The trader said that there was decent flow in the morning but by afternoon things were quiet.

On the flip side, a second trader said that the cash market was down on the day, primarily because it's so illiquid right now.

Brick Power floats OID

Over in primary news, Brick Power is offering all three tranches under its $202 million credit facility to lenders with an original issue discount of 98, according to a market source.

As was previously reported, price talk on the three tranches is Libor plus 350 bps with a 3.5% Libor floor.

Tranching on the deal is comprised of a $20 million revolver, a $17 million letter-of-credit facility and a $165 million term loan.

Barclays and Goldman Sachs are the lead banks on the facility that will be used to refinance existing debt.

Brick Power is a power plant operator.

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