Clearwire Guidance Makes WiMAX Look Like 14.4kbp Modem Speeds (CLWR)

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Clearwire (NASDAQ: CLWR) has just posted earnings this morning, and so far shares are taking a hard hit.  The near-broadband WiMAX operator and service provider posted on $45.4 million in service revenues, a 91% growth rate year over year; First Call had estimates at $46 million.  Its adjusted EBITDA was $83.1 million.  None of this really matters right now if you look further down at the guidance for 2008.

Clearwire ended the year with approximately 394,000 subscribers, reflecting a 91% increase of approximately 188,000 subscribers during the year.  It also noted that the coverage market was approximately 16.3 million people covered by its network in 50 domestic and international markets, which is compared to approximately 9.6 million people in 36 markets at the end of 2006.

Average Revenue Per User for Q4-2007 was just over $36.00, slightly below the year-ago quarter due to an increase in holiday season sales promotions and slightly higher international bad debt expense. Consolidated churn was 2.4% in Q4-2007 fourth quarter, while domestic churn was 2.1% in the same period.

The company did offer several bits of guidance for 2008.  It sees a 23% to 35% growth in total POP’s covered to 20 to 22 million, and expects a 29% to 35% subscriber growth to end 2008 with 510,000 to 530,000 subscribers.  It also sees revenues growing another 36% to 42% to a range of $205 to $215 million.  First Call has 2008 revenue estimates at more than $270 million and even the lowest estimate seen for 2008 is $206.9 million. 

Shares are now down 10% at $13.00 in pre-market trading.  Unfortunately, despite a $0.49 gain yesterday to $14.40, shares were north of $17.00 last week.

Jon C. Ogg
March 4, 2008