Leap Reports Customer Losses, Shares Take TumbleWednesday, August 8, 2012
Shares of Leap Wireless International Inc., parent of Cricket, the San Diego-based flat-rate wireless carrier, reached a 52-week low of $4.28 and closed at $4.49 after the company released its second quarter results showing a big loss in customers.
For the quarter, Leap reported a net loss to common shareholders of $41.6 million, compared with a net loss of $65.2 million for the like period of 2011.
The company said its total revenue grew 3.5 percent over the same quarter one year ago to $786.8 million.
Leap said its net customer losses in the quarter were 289,270, nearly triple the number of customer losses it sustained in the like quarter of 2011.
Its total customers at June 30 were 5.9 million, up 2.7 percent from the second quarter of 2011.
CEO Doug Hutcheson said the results were softer than anticipated. In the coming weeks, Leap plans to announce significant enhancements to its service plans, and to make improvements in its customer experience, including adding more desirable handsets, he said.
The company also plans to reduce its capital spending by $80 million mainly by managing investments in 3G capacity, and exploring cost-effective alternatives to deliver 4G services, Hutcheson said.
Shares of Leap, traded on Nasdaq under the symbol LEAP, lost $1.03, or more than 18 percent, from the previous day’s closing price after results were announced.