Earnings: Clearwire Expects Eight Major Mobile WiMax Markets, 100 Devices By Year-End
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Clearwire (NSDQ: CLWR), the Kirkland, Wash.-based company rolling out WiMax wireless broadband nationwide, reported fourth quarter and year-end financial results, but mostly took the opportunity to talk about the positive things happening in 2009. That forward-looking focus was likely for two reasons. The first is because Clearwire merged with Sprint (NYSE: S) Nextel’s WiMax operations during the year and received more than $3 billion in investments from a handful of cable companies, and Google (NSDQ: GOOG). The second reasons is because over the past few months so much attention has given to other companies, including Verizon Wireless (NYSE: VZ), AT&T (NYSE: T) and Vodafone (NYSE: VOD), which have chosen another technology path: LTE. The company’s stock fell 28 cents to close at $3 a share in regular trading.
Earnings elease | Webcast (1:30 p.m. PST).
The financial results and the business outlook after the jump…
The financial results: Because of the merger, Clearwire reported revenues of $20.5 billion for both the fourth quarter and year end 2008. It’s net loss was $118 million in the fourth quarter and $432.6 million for the full year. Net loss attributable to diluted shares was 28 cents for the fourth quarter. Pro forma numbers are likely a better gauge because it includes results from both Sprint and the old Clearwire. In Q4, pro forma revenue increased 32 percent to $59.7 million, compared to $45.4 million in the period 2007. Revenue growth was driven by 5,000 net new subscribers Clearwire added during the period. In all, it now has 475,000. Q4 ARPU was $39.70, which grew because of increased sales of new services to existing customers, including VoIP and PC Cards.
Expectations going forward:
—First mobile WiMax launch: The company said that its first mobile WiMax launch in Portland, Ore. saw initial sales more than double compared to any other of the company’s 47 other launches.
—Mobile WiMax expectations: It expects to reach 120 Million Americans in 80 markets in 2010; The cities it expects to launch in 2009 include: Atlanta, Las Vegas, Chicago, Charlotte, Dallas/Ft. Worth, Honolulu, Philadelphia and Seattle. Cities in 2010 include: New York, Boston, Washington, D.C., Houston and the San Francisco Bay Area.
—Clearwire expects to launch a modem that will roam between 3G and 4G networks.
—The company will launch a “personal hot spot,” which will WiMax to be rebroadcast into Wi-Fi. The device is expected by the end of the month.
—Clearwire expects there to be nearly 100 mobile WiMAX devices – such as laptops, netbooks, handhelds, USBs and modems – by the end of the year.
Business outlook:
—Suspending metrics: During Clearwire’s build-out phase, operating statistics will not be comparable to previous periods, so Clearwire will not report ARPU, or average revenue per user, over this period. It also expects that Churn to increase in its pre-WiMAX markets as it transitions these networks to mobile WiMAX technology. Costs will also increase as new markets are launched.
—Cash spend: Clearwire expects to spend $1.5 to $1.9 billion in 2009, and expects to have enough cash resources into 2011 (although this time period can be extended as it is driven largely by the pace of expansion).
@triciad
Mar 5, 2009 4:39 PM ET
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