Clearwire Keeps Up the Monster Losses, but Investors Cheer

The first quarter of 2012 didn't end well for Clearwire (Nasdaq: CLWR  ) . Total revenue of $322.6 million was down almost 11% over the previous quarter. That resulted in an operating loss of $421.9 million, a slight improvement only over the previous quarter. At least the $0.44 loss per share was still a big improvement over last year's first-quarter $0.93 loss.

The rate of net subscriber additions was down considerably. The previous quarter saw a net gain of 873,000 customers, but only a net gain of 586,000 for Q1. The company now has 11,000,000 total subscribers, up from 10,414,000 last quarter, and up from 6,105,000 a year ago.

The cost per gross additional subscriber improved a bit. CPGA is now $242, compared with the previous quarter's CPGA of $259. And the annual revenue per user figure has moved slightly in the right direction: now at $46.83, compared with last quarter's $46.69.

Clearwire's cash and cash equivalents position is down quite a bit over last quarter. It now has $310.1 million under its bed, compared with $891.9 million it had at the end of 2011, though short-term investments saw a raise.

Even though the numbers didn't paint a pretty picture, Clearwire CEO Erik Prusch voiced optimism:

"The compelling growth of wireless data is driving the need for more spectrum capacity and attracting new entrants to the market. Clearwire's high capacity LTE Advanced-ready network will sit at the intersection of these two trends."

Analysts seemed to agree and the stock moved up 5% after-hours.

A positive point to Clearwire's earnings showed that, for the first time, its operating activities gave the company net cash of $65.7 in the first quarter. This is the result of the new agreement the company has with Sprint Nextel (NYSE: S  ) , which provided Clearwire with some cash payments.

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Fool contributor Dan Radovsky has no financial interest in the above-mentioned companies. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (8) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 26, 2012, at 11:17 PM, uxler wrote:

    If it weren't for the hyperbolic title, I'd have let this useless drivel go. But, given your Motley-esque attempt at drawing page views with a provoking and deceitful headline, I cant resist letting you know how sophomoric I think this article is.

    If this is the only type of insight you can offer on Clearwire, you should really refrain from covering the company and really the entire industry. You've basically cherry picked a few numbers from the ER and given them absolutely no context. Your title claiming "Monster Losses" is obviously deceptive, and is never substantiated in the article. In fact, you reluctantly end up stating the companies progress rather than its shortcomings.

    A quarters worth of drama punctuated by an earnings report chock full of compelling developments in a highly volatile industry and this is the best you can come up with?

  • Report this Comment On April 26, 2012, at 11:28 PM, ryanjmorrell wrote:

    I couldn't agree more with you UXLER.

  • Report this Comment On April 26, 2012, at 11:31 PM, MattC69 wrote:

    WOW! Busy day today Dan - I see you've managed to bag CLWR and pump PCS when the market see's things completely opposite. What a contrarian you are...

  • Report this Comment On April 27, 2012, at 4:17 AM, Monkeymanor wrote:

    Dear Dan,

    I've seen a fair amout of outlandish things written by Fools here and there, but this is the most irresponsible market commentary I have seen yet. Please check the financial statements again (and if you are goin to cover a company, it might be worth to listen to the earnings call).

    Clearwire has 1.4 BILLION in cash, equivalents, and short-term investments, not 310 million. The rollout has not yet begun and their cash position is actually UP from December 2011.

    Please be more responsible in your coverage.

    Best,

  • Report this Comment On April 27, 2012, at 7:55 AM, XMFDRadovsky wrote:

    Monkeymanor,

    My figure of $310 million in cash and equivalents was correctly taken from Clearwire's balance sheet, but I do agree with you that it would have been fairer to also include the company's short-term investments, which would indeed have added up to $1.4+ billion.

    Dan

  • Report this Comment On April 27, 2012, at 8:21 AM, MattC69 wrote:

    Oh, you think so Dan... Really? It might have been fairer to apply some facts and objectivity?? Really? Go back to journalism 101 - you're disgraceful!

  • Report this Comment On April 27, 2012, at 9:45 AM, cjmac136 wrote:

    Dan,

    Why would you follow the financial industries convention and include short term investments, when you can now claim to be either an incompetent or a manipulator. You have not only misreported you have also added no valuable insight into the direction or activities of the company. How nice that you also ignored the 8%+ gain during regular trading hours. I really don’t mind if you have a short supporting agenda, Clearwire has given you plenty of ammo with its pps performance this year, but don’t pretend to be something else than a poorly written basher of the company.

  • Report this Comment On April 27, 2012, at 9:53 AM, spokanimal wrote:

    I'm with uxler... horrible job on this piece.

    The whole notion of $1.2 billion from sprint over 2 years with 3/4 of it as cash in year 1 but with revenue recognition realized in "straight line" fashion was badly communicated here... and absolutely no mention of the cash that will come in 2013 from CLWR hitting their LTE build target ($350 million).

    A novice reader of this piece would be badly mis-lead.

    Spokanimal

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