Clearwire stock gyrates on results, speculation

Expectations of a future re-partnership with Sprint Nextel Corp. to deploy a nationwide WiMAX network appears to have overshadowed mixed financial results for Clearwire Corp., which has seen its stock price fluctuate wildly today following the release of its fourth-quarter and full-year 2007 results.
The wireless broadband service provider said it added 47,000 customers during the final three months of 2007, which was a slight improvement compared with the 44,000 subscribers the company added in 2006 and in line with analyst estimates. For the year Clearwire nearly doubled its customer base from 206,000 subscribers at the end of 2006 to 394,000 at the end of last year.
Clearwire noted the strong Q4 growth was the result of an increase in holiday sales promotions that pressured average revenue per user, which fell slightly from $36.39 in 2006 to $36.09 last year and well short of the $40 expected by analysts. For the year, ARPU increased from $35.06 in 2006 to $36.81 in 2007, but again fell short of estimates.
Despite the ARPU slump, Clearwire posted a 91% jump in revenues during the fourth quarter and a 51% increase in revenues for the year. The company noted that Q4 revenues improved from $23.7 million in 2006 to $45.4 million last year, while full-year revenues increased from $100.2 million in2006 to $151.4 million last year. Both results were in line with estimates.
That increase in revenues was more than offset by increased operational expenses for the rapidly company; net losses plummeted from $284.2 million in 2006, a loss of $2.93 per share, to a loss of $727.5 million in 2007, a loss of $4.58 per share. The company attributed the increase to expenses related to launching 14 new markets during the year.
During a call to discuss its financial results, Clearwire also echoed earlier comments from Sprint Nextel executives that the two companies were in discussions regarding a partnership to deploy a nationwide mobile WiMAX network. The two companies were previously linked in a venture that was scuttled following an executive shake up at Sprint Nextel last year.
Clearwire’s financial results had a roller-coaster impact on investors, who initially sent Clearwire’s stock down more than 10% in early trading, only to have the stock gain most of its losses back before again losing traction. The company’s stock was trading at $13.69 in mid-day trading, which is nearly half the value of its initial public offering last year.