Leap Wireless International Inc. reported delayed first-quarter results that were in line with recently released guidance. Leap previously stated that the delayed reporting was due to accounting issues.
The carrier said it added 45,575 net subscribers during the first quarter, counting 1.615 million customers at the end of March. Leap’s reported customer growth matched guidance for fourth-quarter and full-year 2004 results, but fell short of the 65,691 subscribers the carrier added during the first quarter of 2004.
The year-over-year shortfall was due to a 2.6-percent drop in gross customer additions and an increase in customer churn from 3.1 percent during the first quarter of 2004 to 3.3 percent this year.
Leap reported that average revenue per user increased from $37.45 during the first quarter of 2004 to $39.03 this year, which was at the high end of its guidance. The carrier’s cost per gross addition also increased from $124 last year to $128 this year, while the cash cost per user dropped from $20.08 during the first quarter of 2004 to $18.94 this year.
Total revenues surged more than 10 percent year-over-year from $206.8 million during the first quarter of 2004 to $228.4 million this year. Leap previously said it expected to post between $223 million and $228 million in revenues during the quarter.
Net income improved from a loss of $27.8 million during the first quarter of 2004, a loss of 48 cents per share, to a return of $12.7 million this year, or 21 cents per share.
Leap also updated its full-year guidance. The carrier dropped the low end of its net customer additions’ forecast from 150,000 subscribers to 125,000 subscribers, while keeping the high end at 200,000 subscribers; said it expects full-year churn of between 3.5 percent and 4 percent; and forecast revenues of between $890 million and $950 million.
In addition, Leap nearly doubled its capital expenditure forecast for the year, saying it expects to spend between $175 million and $230 million instead of the previous guidance of between $110 million and $120 million. The new forecast includes capex of between $20 million and $25 million associated with the buildout and launch of service in Fresno, Calif., and related expansion and network changeout of its existing Visalia, Modesto and Merced, Calif., markets.
Leap also linked the increase to the initial development of markets covered by licenses the carrier acquired during the Federal Communications Commission Auction 58. Leap acquired 10-megahertz spectrum licenses covering 13 new markets-including spectrum in Houston and San Diego-totaling more than $235 million.
