Clearwire’s stock drops on Q2 loss

Fresh off the heels of a major deal with Sprint-Nextel Corp. to collaborate on the construction and operation a nationwide mobile WiMAX network, Clearwire Corp. reported a $70.2 million loss in the second quarter, due primarily to its continued investment in the construction and deployment of wireless networks in new markets and subscriber acquisition costs.
Those losses are helping company growth, however; the company reported approximately 41,000 subscriber additions for the quarter, bringing its total subscriber base to 299,000 customers. That marks a 16% increase from the previous quarter and a 130% increase from the year-ago period.
Clearwire said it ended the quarter with a network capable of covering around 11.6 million people in 43 domestic and international markets, which is double its covered population from the year-ago period. Clearwire lit up five new markets in the quarter-Richmond, Va.; Wenatchee, Wash.; Lubbock and Longview, Texas; and Ghent, Belgium, increasing its network coverage by approximately 1.5 million people in the quarter.
Clearwire’s revenue more than doubled to $35.5 million from the $15.4 million it posted in the same period a year ago, but gross margins were lower from the previous quarter due to the cost of new market launches.
“We are pleased that both aspects of Clearwire’s business-new market development and construction on the one hand, and high-speed Internet and voice services on the other-met our expectations for the first half of the year,” CEO Ben Wolff said.
“With 14 of these markets cash-flow positive and a number of additional markets poised to become cash-flow positive over the next two quarters, we are proving that we can succeed in a variety of different types of markets across the country,” he added.
Clearwire’s stock was down almost 14%, dropping $4.04 to $25.48 on the news.