Leap Wireless Earnings: A Return to Profitability

Leap Wireless International Inc. (NASDAQ:LEAP) climbed to a profit in the third quarter and beat Wall Street’s expectations in the process. Leap Wireless International is a wireless communications carrier that offers digital wireless services in the United States under the Cricket brand.

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Leap Wireless International Inc. Earnings Cheat Sheet

Results: Reported a profit of $25 million (32 cents per diluted share) in the quarter. Leap Wireless International Inc. had a net loss of $68.8 million or a loss 90 cents per share in the year-earlier quarter.

Revenue: Rose 1.4% to $774 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Leap Wireless International Inc. beat the mean analyst estimate of a loss of 76 cents per share. It fell short of the average revenue estimate of $831.9 million.

Quoting Management: “During the third quarter, we continued a significant transition of our business to meet the changing needs of our customers and improve our financial performance,” said S. Douglas Hutcheson, Leap’s president and chief executive officer. “We increased pricing on entry-level smartphones to improve customer survival and plan to continue adding higher-quality, higher-priced handsets to our device portfolio.”

Key Stats:

After two quarters of falling short, the company beat estimates last quarter. In the second quarter, it missed the mark by 2 cents, and in the first quarter, it came in under estimates by 27 cents.

The company’s profit in the latest quarter follows losses in the three previous quarters. The company reported a net loss of $41.6 million in the second quarter, a loss of $98.4 million in the first quarter and a loss of $84.4 million in the fourth of the last fiscal year.

Revenue has now increased for three quarters in a row. In the second quarter, revenue rose 3.4% to $786.8 million while the figure rose 5.9% in the first quarter from the year earlier.

Looking Forward: Analysts seem more positive about the company’s results for the next quarter than a month ago. The average estimate for the fourth quarter has moved from a loss of $1.23 a share to a loss of $1.22 over the last thirty days. In the past thirty days, the average estimate for the fiscal year has reached a loss of $3.83 per share, up from a loss of $3.84.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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