Shares of Clearwire fell 3.5 percent Monday as the WiMax pioneer narrowed its net loss in the third quarter but missed the consensus of Wall Street estimates.
The stock was down $0.28 at $7.76 in early afternoon trading.
Clearwire posted a 47 percent increase in revenue for the period ended September 30 to $60.8 million versus the year-ago period, but missed the consensus estimate of analysts polled by First Call by a penny when net loss per share came in at $1.01 versus a loss of $2.01 in the year ago quarter. Though average revenue per user increased from $37.41 to $40.43, the churn rate increased from 2.3 percent in the 2007 quarter to 3 percent in the September period.
The earning report comes just 10 days before shareholders vote on a plan to fold the Kirkland, Washington, company into a joint venture with the WiMax unit of Sprint Nextel.
In a conference call, Chief Executive Benjamin Wolff said the company had cleared all regulatory hurdles, including the Federal Communications Commission and the Department of Justice. All that remains to clinch the $14.5 billion deal is to win approval from lenders and shareholders, putting the joint venture “on track for a before-end-of-year closing.”
Once the Sprint’s Xohm WiMax service gets rolled into Clearwire, the new company, which will take the Clearwire name, stands to get a fresh injection of $3.2 billion from investors that include Google, Intel, Comcast, Time Warner and Bright House Networks. The deal would give Sprint, which has struggled to retain subscribers, a jump on other cellular providers in offering a 4G service.
The company attributed the increased churn rate to reduced marketing efforts in some markets in credit troubles afflicting consumers in a shaky economy.
Mr. Wolff said that the burgeoning market in netbooks, stripped down lightweight notebook computers, presents an opportunity for Clearwire.
“Vendors every week are coming to our office showing a new design or device,” he said, adding that many such devices capable of receiving WiMax signals will be launched in 2009.