iPhone competition hurts Clearwire's growth as loss widens
On the plus side: A renewed agreement with Sprint and the looming demise of potential rival LightSquared. On the minus side: The iPhone.
Wireless operator Clearwire's fourth-quarter results were fairly disappointing, but at least its longer term prospects are starting to brighten.
The company, which supplies Sprint Nextel with 4G WiMax wireless service, reported a fourth-quarter loss of $236.8 million, or 81 cents a share, compared with a year-ago loss of $128 million, or 79 cents a share.
Revenue, however, more than doubled to $361.9 million as the company started picking itself up off the mat.
Wall Street analysts were looking for Clearwire to lose 35 cents a share and post revenue of $356.7 million. The company.
Despite the wider loss, the company still has a pulse after getting a, its largest shareholder and customer. The company cut a deal that would ensure Sprint's business for the next several years, providing a steady source of revenue.
Clearwire, meanwhile, is attempting to change its network to the newer and faster 4G LTE technology from its current WiMax network. The company plans to sell capacity on its LTE network on a wholesale basis, and is lining up potential customers.
Analysts point to the impending demise of LightSquared, which also planned a wholesale 4G LTE network, as a boon to Clearwire.
Clearwire's total net new customers fell to 873,000 from 1.5 million a year ago. The company ended last year with a total of 10.4 million customers.
Clearwire's biggest source of customers is Sprint. But the fourth quarter marked the debut of the iPhone for Sprint, which doesn't run on WiMax. New customers opted to buy the iPhone over Sprint's 4G lineup, which rely on Clearwire's network, meaning less demand for its WiMax network.
The company has essentially shut off its retail business, which runs on the Clear brand. It lost 31,000 retail subscribers in the period.