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Tuckcell lletisim Hizmetleri's ( TKC - Get Report) Q3 FY08 revenue grew 19.6% to $2.06 billion from $1.72 billion in Q3 FY07. The reported revenue growth was supported by a 4.3% subscriber growth, 7.5% appreciation of Turkish Lira (TRY) against U.S. dollar, and the partial impact of a 31.6% increase in usage combined with upward price adjustments.

Looking at its international operations, revenue from the Fintur's operations, in which TKC holds 41.5% stake, rose 21.7% to $500.00 million from $411.00 million, attributable to 25.3% increase in the total number of subscribers to 12.40 million from 9.90 million a year ago. Revenue from the Astelit operations, which includes Tuckcell's 55.0% stake, grew 68.2% to $127.80 million from $76.00 million, fueled by 40.8% increase in subscriber base, and 20.7% rise in average revenue per user (ARPU).

Looking at the metrics, total subscriber base increased to 36.30 million from 34.80 million. Number of postpaid subscribers rose 14.3% to 7.20 million from 6.30 million, while prepaid subscribers inched up to 29.10 million from 28.50 million. Blended ARPU rose 13.1% to $17.30 from $15.30. Postpaid ARPU grew 6.1% to $41.90, while prepaid ARPU improved 12.0% to $11.20 from $10.00. Blended MOU (Average Monthly Minutes of usage per subscriber) grew 31.6% to 109.20 from 83.00 a year ago. Finally, churn rate increased to 6.2% from 5.7% a year ago.

Tuckcell's gross profit margin for the latest third quarter declined 534 basis points to 60.82% from 66.16% a year ago, due to 17.0% increase in direct cost of revenue to $935.50 million from $799.90 million. Depreciation and amortization expenses declined 14.9% to $172.00 million, whereas selling and marketing expenses spiked 23.5% to $366.80 million. Similarly, administrative expenses rose 54.5% to $87.90 million from $56.90 million. Consequently, operating margin declined 68 basis points to 32.46% from 33.14% in Q3 FY07. Interest expenses rose 57.2% to $19.19 million from $12.21 million, thereby deteriorating the interest coverage ratio to 34.87 from 46.81.Overall, net income surged 50.5% to $603.79 million or $0.69 per share from $401.19 million or $0.46 per share in the prior year's quarter.

For the quarter ended September 2008, Tuckcell's cash and cash equivalents spiked 21.0% to $3.21 billion from $2.66 billion. Moreover, a quick ratio of 1.95 reflects the company's strong ability to cover any short term cash obligations. Total debt rose 10.9% year-over-year to $820.89 million from $739.95 million, whereas shareholders' equity advanced 24.4% to $6.65 billion from $5.35 billion. As a result, the company's debt-to-equity ratio improved to 0.12 from 0.14. Furthermore, return on assets escalated 389 basis points to 20.06% from 16.17%, while return on equity ascended 575 basis points to 28.87% from 23.12%.

During the quarter under review, the company completed the acquisition of an 80% stake in Belarusian Telecommunications Network (BEST). The company also announced that it is in talks to buy a 51.0% stake in Datacom Solutions. Furthermore, TKC signed an agreement with Apple ( AAPL) to sell third-generation iPhone in Turkey. Recently, Turkcell Iletisim Hizmetleri announced that its wholly owned subsidiary, Turktell Bilisim Interaktif Hizmetleri (Turktell), has sold its 55.0% in Bilyoner Interaktif Hizmetler to Demir Toprak.

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