There's little surprise that shares of broadband wireless upstart Clearwire
Clearwire reported quarterly service revenue of $35.5 million, more than double the $15.4 million seen a year ago. But high expenses led to a $118 million net loss, a sum that even surprised a few analysts. The company spent heavily as it aggressively launched new markets for its WiMax-based broadband service. The big spending binge did result in a jump in net subscriber additions of 41,000, though, bringing the total subscriber base now to 299,000.
If investors can overlook the fact that Clearwire is burning nine figures a quarter, the business momentum is actually quite impressive. Even before cross-selling deals with Echostar
Initial markets launched in 2006 have also shown consistent trends toward profitability -- indeed, management made a point to highlight that its initial markets are now cash flow positive. And the recent agreement with Sprint Nextel
The impressive operating numbers and string of deals have been enough to convince several top-tier banks to provide additional credit to Clearwire, demonstrating that there's still a large contingent willing to overlook losses for now. And with plenty of cheap money still floating around in the markets, Clearwire will likely be able to continue on its up-and-down path for quite some time.
For more Foolishness:
- Sprint, Clearwire Form Team WiMax
- Foolish Forecast: Clearwire Bulks Up
- Clearwire Taps Into Satellites
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Fool contributor Dave Mock keeps an even keel to smooth out the ups and downs. He owns no shares of any companies mentioned here. Dave is the author of The Qualcomm Equation. The Fool's disclosure policy sets a new standard for all young disclosure policies to look up to.