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Leap Wireless (LEAP) Posts Narrower Than Expected Q4 Loss

 February 20, 2013 12:04 PM

(By Balaseshan) Leap Wireless International Inc. (NASDAQ: LEAP) reported a narrower quarterly loss due to a net gain associated with a spectrum transaction, while service revenue fell 4%.

Loss for the fourth quarter narrowed to $74.28 million or $0.96 per share from $84.38 million or $1.10 per share in the previous year quarter.

Total revenue decreased to $755.98 million from $767.4 million. Service revenue was $700.2 million, primarily due to a lower average number of subscribers on lower gross additions and the increase in total company churn.

Analysts, on average, polled by Thomson Reuters had expected a loss of $1.53 per share on revenue of $778.81 million for the fourth quarter.

[Related -Leap Wireless International, Inc. (LEAP): Best Way To Gain Upside From Lower 700 Block A Spectrum]

The company reported about 419,000 gross customer additions and about 337,000 net customer losses for the fourth quarter of 2012. Customer churn was 4.6% for the latest quarter.

About 322,000 of the total gross customer additions and about 202,000 of the total net customer losses for the fourth quarter of 2012 related to Cricket Wireless service, the company noted. Customer churn for Cricket Wireless was 3.7%.

End-of-period customers for the fourth quarter were 5.3 million, a 10.7% decrease from last year. The company reported a net loss of 337,035 customers for the fourth quarter, compared to net additions of 178,889 customers in the previous year quarter.

[Related -Futures Up After China Data; Citi (C), AT&T Inc. (T),Leap Wireless International Inc. (LEAP) In Focus]

ARPU for the fourth quarter of 2012 was $42.73, an increase of $0.64 over last year, primarily reflected fewer retention programs, a reduction in the number of customers for its daily PAYGo product and an improved mix of customers on higher-value service plans.

Looking ahead into the fiscal 2013, the company expects total capital expenditures to be between $275 million and $325 million, including up to $100 million which may be spent to deploy next-generation LTE network technology.

LEAP is trading down 6.05% at $5.75 on Wednesday. The stock has been trading between $4.28 and $11.30 for the past 52 weeks.

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