Leap Wireless International Inc. ( LEAP ) declared mixed
financial results for the first quarter of 2013, with the bottom
line lagging the Zacks Consensus Estimate and the top line beating
the same. Additionally, Leap Wireless suffered a significant net
subscriber loss. Consolidated customer churn rate was 3.6% compared
with 3.3% in the prior-year quarter.
The prepaid wireless operator Leap Wireless, which offers
products under the brand name of "CRICKET", faces massive
competitive threat from other prepaid service providers. Apart from
its closest rival MetroPCS Communications Inc. (
PCS ), the Boost
Mobile and Virgin Mobile services of Sprint Nextel
Corp. ( S )
and Tracfone of America Movil SAB ( AMX ) are competitive
threats. Moreover, MetroPCS is on the verge of being acquired by
T-Mobile USA. Leap Wireless currently has a Zacks Rank #3
Net loss, in the first quarter of 2013, was $111.3 million or a
loss per share of $1.43 compared with a net loss of $98.4 million
or a loss of $1.28 per share in the prior-year quarter. Quarterly
net loss per share of $1.43 was significantly higher than the Zacks
Consensus Estimate of a loss of $1.20. Quarterly cash cost per user
(primarily indicating carrier subsidy for new smartphone) was
$26.36, up 7.4% year over year.
Quarterly total revenue was $789.9 million, down 4.3% year over
year but well above the Zacks Consensus Estimate of $735 million.
Service revenues were $684.6 million, down 11.6% year over year.
Equipment revenues were $105.2 million, up 103.9% year over
Quarterly gross margin was 35.5% compared with 38.3% in the
prior-year quarter. Operating loss was $29.4 million compared with
$15.8 million in the prior-year quarter. Adjusted OIBDA was $121.1
million, down 7.2% year over year. Adjusted OIBDA was 15.3% of the
service revenue compared with 15.8% in the year-ago quarter.
During the first quarter of 2013, Leap Wireless generated $25.6
million of cash from operations compared with $35.4 million in the
prior-year quarter. Free cash flow was a negative $0.8 million
compared with a negative $111 million in the year-ago quarter. At
the end of the first quarter, Leap Wireless had over $667.1 million
of cash and marketable securities compared with $675 million at the
end of 2012. Total debt, at the end of the reported quarter, was
over $3,303.6 million compared with $3,302.5 million at the end of
2012. Debt-to-capitalization ratio was 0.91 compared with 0.88 at
the end of 2012.
During the reported quarter, Leap Wireless lost 93,037 net
customers against a gain of 258,060 customers in the year-ago
quarter. Total subscriber base, at the end of the first quarter of
2013 was 5,203,747, exhibiting a 16% year-over-year drop. ARPU was
$43.72, up 2.7% year over year. Quarterly cost per gross addition
increased 39% year over year to $317.
Leap Wireless lost 8,502 net customers for its wireless segment
against a gain of 163,613 customers in the year-ago quarter.
Quarterly wireless churn rate was 2.9% compared with 3.1% in the
year-ago quarter. Wireless subscriber base was 4,636,867,
exhibiting a 10.3% year-over-year drop. AMER MOVIL-ADR (AMX): Free Stock Analysis
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