Nomura Securities Cuts Numbers on Leap Wireless (LEAP)

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Nomura Securities cut estimates and its price target on Neutral-rated Leap Wireless (NASDAQ: LEAP) from $6 to $5 following second quarter results after the close.

Analyst Mike McCormack comments: Leap reported subscriber losses and ARPU of 289k and $41.64, materially worse than our estimates (105k) and $43.00, respectively. Leap’s growth strategy has been defined by low margin ARPU, poor execution and a lack of FCF generation. Unlike peer MetroPCS, which also experienced the same poor macro environment, Leap did not deliver strong margins usually resulting from muted gross adds.

The firm is lowering our 2012 and 2013 subscriber estimates, they now expect the company to lose subscribers in 2012 and deliver flat net additions for 2013. F12E EBITDA from $645 to $665, F13E EBITDA from $717 to $659.

For an analyst ratings summary and ratings history on Leap Wireless click here. For more ratings news on Leap Wireless click here.

Shares of Leap Wireless closed at $5.52 yesterday, with a 52 week range of $4.68-$11.30.

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