Leap Wireless International Inc. reported delayed fourth-quarter and full-year 2004 results that included strong customer growth and improving financial metrics.
The carrier said it added 29,000 subscribers during the final three months of last year, compared with a loss of 5,000 customers in fourth-quarter 2003. Leap noted that it added 97,000 subscribers for all of 2004, compared with a loss of 39,000 customers during 2003, and that it ended 2004 with 1.57 million total customers.
The robust quarterly growth was boosted by a 21-percent increase in gross subscriber additions and a drop in customer churn from 4.3 percent during the fourth quarter of 2003 to 4.1 percent last year. Full-year gross subscriber additions also improved 10 percent to 807,868 customers in 2004, while full-year churn dropped from 4.4 percent in 2003 to 3.9 percent last year.
Average revenue per user increased more than $1 during the fourth quarter from $36.28 in 2003 to $37.29 last year, while full-year ARPU jumped from $36.25 in 2003 to $37.28 last year. Leap noted that ARPU was reduced by 52 cents during the fourth quarter and 13 cents for all of 2004 due to higher-than-expected rebate activity during the final three months of last year.
The increased rebate activity also impacted Leap’s cost per gross addition, which increased from $136 during the fourth quarter of 2003 to $159 last year. Full-year CPGA improved from $158 during 2003 to $142 last year.
Leap also reported that its cash cost per user improved from $19.95 during the fourth quarter of 2003 to $18.74 last year, while full-year CCPU dipped from $22.34 in 2003 to $18.91 last year.
The strong customer growth, improved financial metrics and emergence from bankruptcy protection last August also helped propel up Leap’s total revenues 9.4 percent during the fourth quarter from $188.9 million in 2003 to $206.6 million last year. Fourth-quarter net losses plunged from a loss of $172.8 million in 2003, or $2.95 per share, to a loss of $6.6 million last year, or 11 cents per share.
Leap’s full-year revenues also increased nearly 10 percent from $751.3 million in 2003 to $826 million last year, while net income turned from a loss of $597.4 million in 2003 to a return of $904.6 million last year. Leap noted that its 2004 net income included $962.4 million of reorganization items reflecting its “fresh-start accounting” implemented following its emergence from bankruptcy protection.
Leap’s management also released preliminary first-quarter results that included nearly 46,000 net customer additions, a 3.3-percent customer churn rate and ARPU between $38.25 and $39.25. In addition, Leap said it anticipates total consolidated revenues during the first quarter to be in the range of $223 million to $228 million and operating income of between $19 million and $24 million.
