San Diego Business Journal

Leap Reports Net Loss of $185.4M for Q3

Monday, November 11, 2013

Leap Wireless International Inc., the flat rate carrier doing business as Cricket being sold to AT&T, reported third quarter net losses of $185.4 million compared with a net profit of $25 million for the like quarter of 2012.

Revenue in the quarter was $694 million, down 10 percent from the same period last year.

For the nine months, Leap reported a net loss of $460 million, compared with loss of $115 million for the like period last year.

Revenue for the nine months to Sept. 30 was $2 billion, down 10.6 percent from revenue of $2.25 billion in the like period last year.

The company said its $4 billion pending sale to AT&T continues to make progress, with Leap shareholders approving the transaction by 99 percent of the shares voting last month. The deal announced in July will pay shareholders $15 in cash per share plus a right on the sale of Leap spectrum rights in Chicago, or an aggregate $1.2 billion. The purchase includes the assumption of Leap’s outstanding debt of $2.8 billion.

The transaction is being reviewed by both the Federal Communications Commission and the Department of Justice. Completion is expected by the first quarter.

In the latest financial report, Leap said total customers as of Sept. 30 fell to 4.6 million, down 18 percent from the total base in the third quarter of 2012.

In the third quarter it sustained a net loss of 196,000 customers, compared with a net loss of 269,000 customers in the like quarter of last year.

In early trading on the Nasdaq, Leap’s shares were at $16.19. The stock popped above $17 after the AT&T deal was announced, and has not dropped below $15 since then.

— Mike Allen