Dobson Communications Corp. reported mixed operating and financial results for the second quarter, forcing the rural carrier to revise downward its full-year guidance and sending the carrier’s stock down more than 50 percent in early Tuesday trading.
Dobson’s stock plunged more than 50 percent early Tuesday to as low as $1.02 per share, which is a new 52-week low and a fraction of the $8 per share it closed at in mid-January.
Dobson posted $252.4 million in total revenues during the second quarter, which was a 75.9-percent improvement compared with the $143.5 million the carrier reported during the second quarter of 2003. Most of the increase was attributed to a number of acquisitions Dobson had made since late last year, including properties in Alaska, its former American Cellular Corp. joint venture with AT&T Wireless Services Inc., properties in Michigan and the operations of NPI-Omnipoint Wireless L.L.C.
Roaming revenues increased slightly from $48.4 million last year to $50.6 million this year with roaming yields per minute increasing 2 percent year-over-year to 14 cents per minute. AWS and Cingular Wireless L.L.C. remained Dobson’s largest roaming partners, accounting for approximately 90 percent of the carrier’s incollect roaming revenues during the second quarter, while Dobson’s GSM network increased its share of total roaming minutes of use from 10 percent during the first quarter to 23 percent in the second quarter.
Net income applicable to shareholders plunged from $224.4 million during the second quarter of 2003, or $2.42 per share, to a loss of $15.9 million this year, or a loss of 12 cents per share. Dobson noted that last year’s net income included a $194.7 million gain on redemption and repurchase of preferred stock, a $27.5 million gain on the sale of discontinued operations and $5.6 million in income from discontinued operations.
Further impacting Dobson’s revenues was a decline in average revenue per user from $41.99 during the second quarter of 2003 to $40.03 this year and as previously reported a drop in net customer additions from 19,900 last year to 7,200 subscribers this year.
Dobson also previously reported that postpaid customer churn increased from 1.6 percent last year to 1.7 percent this year.
For the rest of the year, Dobson’s management revised its guidance from 455,000 gross customer additions it had forecast earlier this year to 386,500 gross customer additions, and downgraded its expectations for ARPU from around $42 to $40. In combination of a higher-than-expected rate of TDMA-to-GSM migrations, Dobson expects full-year earnings before interest, taxes, depreciation and amortization of between $335 million and $345 million compared with its previous guidance of between $390 million and $425 million.
