BERWYN, Pa.—SunCom Wireless Holdings Inc.’s stock plunged about 20 percent Wednesday on Wall Street, as investors reacted to the company’s widening financial losses during the first quarter.
SunCom’s total revenues dropped about 1 percent compared with the first quarter of 2005, to $201.8 million; roaming revenues were down about $2.4 million from the year-ago quarter. The operator’s loss from operations expanded from about $32.3 million to nearly $110 million. While SunCom’s adjusted earnings before interest, taxes, depreciation and amortization fell from $31 million in the first quarter of 2005 to $7 million this year, adjusted EBITDA was up sequentially from a loss of about $13.5 million in the fourth quarter of 2005.
SunCom’s average revenue per user was down about 7.7 percent from the first quarter of 2005 to $51.55. The regional carrier did manage to cut its churn rate from 2.9 percent a year ago to 2.5 percent in the first quarter, which the company said reflected a stabilization of its customer base. Its gross customer additions were up from about 92,000 in the first quarter of 2005 to about 116,000 last quarter. SunCom gained about 41,000 net customer additions during the first three months of this year.
SunCom, which offers service in the Southeastern U.S., Puerto Rico and the U.S. Virgin Islands, ended the quarter with just over 1 million subscribers.
SunCom also reported that its subsidiary SunCom Wireless Investments Co. L.L.C. contributed $194.4 million to SunCom Wireless Holdings due to a dividend that was improperly paid to the investment company in November 2004.
