Earnings: Clearwire Sees Subscriber Growth Accelerating By Fourth Quarter
Clearwire (NSDQ: CLWR) is trying to show that the pieces of its WiMax business are starting to fall into place. As evidence, during its second-quarter earnings report today, it listed its WiMax launches in Las Vegas and Atlanta; a nationwide roaming agreement with Sprint’s 3G; and the plans by cable and carrier partners — Sprint (NYSE: S), Comcast (NSDQ: CMCSA) and Time Warner (NYSE: TWX) — to actively resell its services. In addition, earlier this morning, it announced a key infrastructure deal with Huawei that will assist with the nationwide build-out.
But all of those efforts will really begin to culminate later this year when it expects to add more net subscriber additions during Q4 than it did during the first three quarters combined, the company said during its analyst phone call today. So far, in the first two quarters, Clearwire has added a net total of 37,000 subscribers. Of course, its reseller deals will help, in addition to expanding coverage to 40 million people in 25 markets by year-end.
| 2Q 2009 | 2Q 2008 | |
|---|---|---|
| EPS | $(0.38) | $(0.40) |
| Net Loss | $(73.4M) | $(79.6M) |
| Revenue | $63.6M | $58.6M |
Release. Webcast (1:30 p.m. PST).
Some key metrics:
– WiMax additions are offsetting higher churn in its pre-WiMax markets, which was expected as the transition from one to another was being made.
– There were 12,000 net adds in Q2 for a total of 511,000 customers.
– Revenues increased 9 percent over the year ago period, driven by a 11 percent jump in subscriber growth.
– Revenue is stable at $39.47 on average per user.
– Ends Q2 with cash and short-term investments of $2.5 billion.
Business Outlook: Clearwire expects ARPU to remain relatively flat while it expands to 4G, but anticipates churn to increase in its pre-WiMax markets. Clearwire plans to spend about $1.5 to $1.9 billion in cash for the full year 2009. Its network build-out will largely be driven by the company
what? they hooked up with Huawei for their base stations! I can't believe this. I would say this is kiss of death for Clearwire. WiMax is already struggling to adopt. Last thing I needed to know a Chinese vendor is behind the infrastructure. The person in Clearwire who made this happen should be fired… F-I-R-E-D!
Hey Clearwire, this is America you are trying to roll out WiMax, not Nigeria! What were you thinking when you picked a Chinese vendor for your base stations? Let me guess! They were cheaper.