Leap 1Q loss expands on higher interest costs
SAN DIEGO—Leap Wireless International Inc., the nation's sixth largest cellphone carrier and operator of the Cricket brand, said Wednesday that its net loss in the first quarter expanded as higher interest expenses overwhelmed a smaller operating loss. The results were worse than analysts expected and Leap's shares fell.
The net loss in the three months to March 31 came to $98.4 million, or $1.28 per share, compared to a net loss of $96.2 million, or $1.26 per share, a year ago.
The operating loss shrank to $15.8 million from $18.1 million a year ago.
Excluding special items, analysts polled by FactSet were looking for a loss of 99 cents per share.
Revenue rose 6 percent to $825.6 million from $779.9 million. That was below the $833.3 million expected by analysts.
Leap shares fell 51 cents, or 7 percent, to $7.20 in extended trading Wednesday following the earnings release. Earlier, shares had closed down 8 cents, or 1 percent, at $7.71.
Leap said it had 258,000 net new customers in the quarter and the number of subscribers rose 6 percent to 6.19 million at the end of March compared to a year earlier.
Churn, or the percentage of customers who cancel service each month, was 3.3 percent, compared to 3.9 percent in the fourth quarter and 3.1 percent in the same period a year ago.
Average monthly service revenue per user rose 8 percent to $42.59 from $39.35 a year ago.
The company said that nearly 62 percent of new handset sales in the quarter were for smartphones or phones that can use its Muve Music unlimited music subscription service. Smartphone or Muve customers tend to generate more revenue for the company.