SAN DIEGO—Leap Wireless International Inc. had a slightly weaker-than-expected fourth quarter, but the company emphasized that it is looking forward to a strong first quarter of 2006.
Leap said it added about 46,000 net new retail customers in the fourth quarter, fewer than the 60,000 net additions estimated by some analysts. The carrier ended last year with a customer base of 1.67 million subscribers. Leap had a churn rate of 4.1 percent for the fourth quarter and 3.9 percent for the full year. Average revenue per user was $39.74 for 2005’s fourth quarter, up considerably from the $37.29 that Leap recorded in the fourth quarter of the previous year.
Leap reported total revenues for the fourth quarter of 2005 of $228.9 million, an improvement of more than $22 million from the $206.6 million it reported during the fourth quarter of 2004. Operating income was up $5.9 million to $10.8 million, and net income was in the black at $5 million, versus a net income loss of $6.6 million in 2004’s fourth quarter.
Leap emerged from bankruptcy protection in mid-2004. The company noted that its adoption of fresh-start reporting as of July 31 of that year “resulted in material adjustments to the historical carrying values of the company’s assets and liabilities.” The company said its post-bankruptcy balance sheets may not be comparable with pre-bankruptcy results.
“We have demonstrated the company’s ability to deliver strong financial performance while investing in new services to meet the needs of our customers, launching new markets for future growth and satisfying our regulatory obligation,” said Dean Luvisa, Leap’s acting chief financial officer. “Looking forward, we see a business well prepared for expansion and development as a result of the strong growth anticipated in both new and existing Cricket markets over the coming quarters.”
Leap outlined ambitious plans to launch in markets covering 14 to 20 million potential customers by the end of 2006, gain between 90,000 to 105,000 net retail customers in the first quarter, and cut its churn to about 3.3 percent in the same time period.
