Leap Wireless International, Inc. (Nasdaq: LWIN) said Monday its third quarter loss was half of what Wall Street was expecting. The wireless communications carrier reported consolidated net loss of $1.26 per share; First Call's consensus of 4 analysts had expected a loss of $3.55 a share.
The company also announced plans to launch its Tennessee-based Cricket service in 8 markets by the end of this calendar year and 25 markets by the end of 2001
Shares were up 1 5/16 to 52 1/16 Monday. The stock has slipped after a steep climb to a 52-week high of 110 1/2 initiated by an "outperform" rating last September. Leap Wireless, which was spun-off from Qualcomm (Nasdaq: QCOM) in 1998, has stakes in mobile phone operations in Tennessee, Mexico, and Chile. It owns Chase Telecommunications of Tennessee, which has more than 40,000 subscribers to its Cricket service.
Leap's net loss of $32.2 million or $1.26 per share, was also much narrower than the $46.7 million or $2.60 per share lost in the same period in fiscal 1999.
Revenue for Leap's consolidated and unconsolidated operating companies for the quarter rose to $36.7 million, a 120 percent increase from the prior quarter. Consolidated operating revenues of $16.9 million were recognized by SMARTCOM PCS and Cricket Communications, which began fully consolidating Chase Telecommunications in this quarter. No revenues were consolidated prior to the fourth quarter of fiscal 1999 and the results of Leap's foreign operating companies -- for the three months ended March 31 -- have a two-month reporting lag, the company said
Leap said it now owns or has the rights to acquire wireless operating licenses covering 41.7 million potential customers in 27 states to offer Cricket service. Since the end of last quarter, the company has inked deals to add wireless operating licenses covering 11.4 million potential customers.
Just after the end of the quarter, Leap also announced a gain of $300 million in cash and notes from the sale of its Chilean wireless venture, SMARTCOM PCS, to Spanish utility company Endesa, S.A. (NYSE: ELE). Leap also has a repayment of all intercompany debt between Leap and SMARTCOM totaling approximately $81 million.
The company said it will re-allocate the $75 million it had budgeted for its Chilean operation elsewhere.
In the company's Mexican joint venture, with PEGASO, it said subscriber growth continued to be strong. New customers were an increase of over 35 percent from the previous quarter.
The company's top competitors include BellSouth (NYSE: BLS) and Telefonos de Mexico (NYSE: TMX) according to Hoover's Online.