Clearwire 3Q Loss Widens On Discounting; Revenue Grows
DOW JONES NEWSWIRES
Clearwire Corp.'s (CLWR) third-quarter loss widened as the wireless Internet
provider's use of promotional discounts to boost its subscriber count offset
higher revenue.
Shares fell 3.5% to $7 in after-hours trading after rising 6.6% in the regular
session. The stock was as low as $2.64 in March.
Earlier Tuesday, the company tapped its major backers for $1.56 billion to
cover its funding gap, enabling it to continue work on building out its next-
generation wireless network. Sprint Nextel Corp. (S), which is the majority
shareholder, will put in the lion's share, with $1.18 billion.
The latest infusion comes about 18 months after Sprint, Intel Corp. (INTC),
Comcast Corp. (CMCSA) and other partners put $3.2 billion into Clearwire, which
is building the first so-called 4G mobile broadband network, known as WiMax. The
company aims to reach more than 80 markets with over 120 million people by the
end of next year.
Clearwire posted a loss of $82.4 million, or 43 cents a share, compared with a
year-earlier loss of $72.7 million, or 45 cents a share. Revenue grew 13% to $
68.8 million.
Analysts polled by Thomson Reuters expected a loss of 43 cents on revenue of $
67 million.
Subscriber count climbed 18%, to 555,000, as net additions surged to 44,000
from 8,000 a year earlier.
Average revenue per user dropped 1.8% to $39.71, hurt by increased promotional
discounts as a result of the higher gross subscription additions. Churn, or
customer cancellations during the quarter, increased to 3.1% from 3%.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com
(END) Dow Jones Newswires
11-10-091636ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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