Leap Wireless International Inc. reported 3,000 net customer additions during the second quarter, which was one-third of the 9,000 customers the carrier added during the second quarter of 2004, but in line with estimates. Leap ended the quarter with 1.618 million total customers.
The net additions shortfall was linked to an increase in customer churn from 3.7 percent during the second quarter of 2004 to 3.9 percent this year, which offset a 6.1-perent year-over-year increase in gross customer additions from 180,000 subscribers in 2004 to 191,000 gross customer additions this year. Leap also managed to grow average revenue per user more than 5 percent from $37.28 during the second quarter of 2004 to $39.24 this year.
In keeping with its low overhead business model, Leap trimmed $3 from its cost per gross addition from $141 during the second quarter of 2004 to $138 this year, as well as a 4-cent improvement in cash cost per user from $18.47 in 2004 to $18.43 this year.
Leap reported that total revenues jumped more than 10 percent from $205.7 million during the second quarter of 2004 to $226.8 million this year. Net income also improved from a loss of $18.3 million during the second quarter of 2004, a loss of 31 cents per share, to a return of $1.2 million this year, or 4 cents per share.
Leap also lowered the high end of its full-year customer growth guidance from 200,000 net customer additions to 175,000 net customer additions and increased its low-end churn guidance from 3.5 percent to 3.7 percent. Leap has posted 48,575 net customer additions through the first half of the year.
The carrier increased financial expectations with total revenues for the year expected to be at least $910 million compared with previous guidance of $890 million, and total earnings before interest, taxes, depreciation and amortization of between $265 million and $285 million compared with previous guidance of between $245 million and $270 million.
Leap’s stock was trading up more than 5 percent early Friday at $33.90 per share.
