Earnings: Clearwire Sees Subscriber Growth Accelerating By Fourth Quarter

Clearwire

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

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