Wireless broadband service provider Clearwire
What analysts say:
- Buy, sell, or waffle? A total of 13 Wall Street analysts follow Clearwire. Of this group, 10 rate the stock a buy, while three say to hold. In our Motley Fool CAPS investor database, 228 of our 60,000 players have a slightly different outlook on the stock, collectively giving it a more pessimistic two-star rating.
- Revenue. On average, analysts predict revenue of $34 million.
- Earnings. No one -- even Clearwire -- expects to be making money at this point. Analysts are looking for a loss of $0.60 per share on average.
What management says:
Clearwire had a busy quarter, even for a young company building out a massive new broadband network. The company made strides in launching several new markets for its service and was able to secure more financing to feed the cash-burning machine. Following the $900 million it received from partners Intel
The financing not only allowed the company to reorganize debt, but also improve its credibility with investors. Chief Financial Officer John Butler said that "by opportunistically accessing the capital markets, we expanded our investor base and further strengthened the company's balance sheet." With most companies, another big dip into the debt well would turn off many investors, but with Craig McCaw's ventures, high leverage is expected.
What management does:
As a recent IPO, Clearwire doesn't have much of a quarterly operating history to speak of, but we're gradually getting a better picture of operations as more markets come on line. As expected, revenue and subscribers are ramping up fast, but losses continue.
2004 |
2005 |
2006 |
1Q 2007 |
|
---|---|---|---|---|
Service Revenue (thousands) |
$243 |
$8,451 |
$67,598 |
$29,275 |
Net Loss (millions) |
$33 |
$140 |
$284 |
$93 |
Subscribers (thousands) |
3.5 |
62.3 |
206.2 |
258.0 |
One Fool says:
Beyond financing deals, the big story with Clearwire lately is the partnership with Sprint Nextel
With a nationwide WiMAX network looking more like reality than fantasy at this point, skeptics who initially doubted Clearwire could even get off the ground likely will focus on the quality and eventual profitability of the service. But with each quarter, as more customers sign up, Clearwire is proving that the economics are there.
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