Wednesday, February 15, 2012

Leap Wireless Benefits from Smartphone Upgrades

Leap Wireless reported Q4 2011 revenues of $729.5 million reported adjusted operating income before depreciation and amortization (OIBDA) of $135.1 million for the fourth quarter, compared to $107.0 million for the comparable quarter of the prior year. Leap also reported a fourth quarter 2011 operating loss of $3.5 million, compared to an operating loss of $27.0 million for the fourth quarter of 2010.

Some highlights:

Leap added 179,000 customers during the fourth quarter of 2011, comprised of approximately 209,000 voice net customer additions and net deactivations of approximately 30,000 broadband customers, bringing total net customer additions for the full-year 2011 to approximately 416,000.

The company ended the year with approximately 5.9 million customers.

Customer churn for the fourth quarter of 2011 was approximately 3.9 percent.

During the second half of 2011, Leap expanded into an additional 6,500 national retail locations, increasing its retail presence to approximately 11,500 locations.

Approximately 60 percent of the Company's new handset sales in the fourth quarter of 2011 were for smartphones and Muve Music devices, compared to approximately 30 percent in the fourth quarter of 2010.

Approximately 10 percent of the Company's customer base upgraded their handsets during the quarter, most of which were upgraded to better devices coupled with higher-ARPU service plans, compared to 13 percent in the fourth quarter of 2010.

ARPU for the fourth quarter of 2011 was $42.09, an increase of $3.95, or 10.4 percent, over the comparable period of the prior year, and $0.84, or 2.0 percent, from the third quarter of 2011.

Capital expenditures were $152.4 million for the fourth quarter of 2011 and $441.7 million for the full year.

Total capital expenditures for 2012 are expected to be between $600 million and $650 million, primarily to support the initial deployment of next-generation LTE network technology, the ongoing maintenance and development of the Company's network and other business assets and other capital projects.