Clearwire (CLWR) Says It Has Cash...But Possibly Not Enough
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Clearwire (Nasdaq: CLWR) shares are moving lower late Thursday following reports the company still might be facing an uphill battle.
With it's quarterly filing Thursday, Clearwire issued a warning it might need to raise more funds for continued build-out of its fourth-generation (4G) mobile network. The news hit investors even after Clearwire successfully raised about $1 billion over the last two months.
Things were looking down for Clearwire from the start Thursday. After the market closed on Wednesday, the company reported a wider-than-expected loss of 81 cents per share for its fourth-quarter, on revenue of $362 million. Clearwire also said it expected fiscal 2012 sales of $1.15 billion to $1.25 billion, missing estimates of $1.37 billion.
Despite the results, things got worse as investors got a peek at the nuts-and-bolts of what happened last quarter. One item stuck out: Clearwire has enough cash to last 2012, but may need to raise more not too far down the line. Additionally, the company might lose as mush as 5 percent of its Clear brand growth as it received two halts in service for telecom giants Comcast (Nasdaq: CMCSA) and Time Warner (NYSE: TWC), which opted for Verizon's (NYSE: VZ) network instead.
Raising money isn't exactly cheap for Clearwire either; reports note about $300 million of debt was sold in January with a coupon of 14.75 percent...about 5 points higher than many lower-rated issuers.
One bright side for Clearwire is recent news from competitor LightSquared. Earlier in the week it was revealed LightSquared was denied an application by the FCC to build a wholesale LTE network in the U.S. because it had "irrevocable issues with GPS equipment." Though LightSquared is likely to make concessions in order to get a license -- like swapping airwaves with the Department of Defense (DoD) -- that might take months as the DoD has to also agree to the swap.
Regardless, Clearwire finished the session down 4.7 percent and is an additional 2.2 percent lower in late trading.
With it's quarterly filing Thursday, Clearwire issued a warning it might need to raise more funds for continued build-out of its fourth-generation (4G) mobile network. The news hit investors even after Clearwire successfully raised about $1 billion over the last two months.
Things were looking down for Clearwire from the start Thursday. After the market closed on Wednesday, the company reported a wider-than-expected loss of 81 cents per share for its fourth-quarter, on revenue of $362 million. Clearwire also said it expected fiscal 2012 sales of $1.15 billion to $1.25 billion, missing estimates of $1.37 billion.
Despite the results, things got worse as investors got a peek at the nuts-and-bolts of what happened last quarter. One item stuck out: Clearwire has enough cash to last 2012, but may need to raise more not too far down the line. Additionally, the company might lose as mush as 5 percent of its Clear brand growth as it received two halts in service for telecom giants Comcast (Nasdaq: CMCSA) and Time Warner (NYSE: TWC), which opted for Verizon's (NYSE: VZ) network instead.
Raising money isn't exactly cheap for Clearwire either; reports note about $300 million of debt was sold in January with a coupon of 14.75 percent...about 5 points higher than many lower-rated issuers.
One bright side for Clearwire is recent news from competitor LightSquared. Earlier in the week it was revealed LightSquared was denied an application by the FCC to build a wholesale LTE network in the U.S. because it had "irrevocable issues with GPS equipment." Though LightSquared is likely to make concessions in order to get a license -- like swapping airwaves with the Department of Defense (DoD) -- that might take months as the DoD has to also agree to the swap.
Regardless, Clearwire finished the session down 4.7 percent and is an additional 2.2 percent lower in late trading.
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