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Clearwire turned the corner? Or just holding its hand out?



blog-0006497001327569527.pngby Robert Herron
Sprint 4G Rollout Updates
Tuesday, January 24, 2012 - 10:01 AM MST


Clearwire let loose today with a select reporting of Q4-2011 financial results. Of course, these are cherry picked to get the mood about Clearwire's financials prospects reversed into positive light. However, I must admit they look a little better than I was expecting.

Clearwire managed to double revenues from the previous quarter reported in 2010. This is attributable to sizable growth in its wholesale business, of which, a whopping majority comes from Sprint Nextel. Their retail business is experiencing significant churn, which is not a surprise given Clearwire's abandoning their retail business model. I was actually expecting churn to be higher.

Clearwire's cash and equivalents are notably higher and cushion the company much better than previous quarterly releases. This is most likely do to Sprint's cash infusions announced last quarter.

I think it's too soon to get completely bullish on Clearwire. However, these are definitely positive developments for the beleaguered wireless carrier. Clearwire is sitting on massive spectrum reserves, which add a huge value to the company's spreadsheets. Clearwire continues to plan for and develop its new upcoming 4G TD-LTE network.

Clearwire will have to integrate and deploy its new LTE network very carefully and thoughtfully. Currently, Clearwire is very dependent on its WiMax network to bring in the revenues. WiMax revenues are likely near their peak and expected to start declining in the next few quarters. Clearwire will need to try to get LTE to generate revenue at a minimum of dollar to dollar as WiMax declines. And that is looking less likely as the LTE network will not likely generate any revenues until Q4-2012 at the earliest. With the exception of perhaps some prepayments from Sprint.

Separately, Clearwire offered $300 Million in Senior Secured Notes to raise additional funding for operations. If I were a betting man, I would wager that Clearwire is releasing these cherry picked Q4 results in order to raise these funds. But I would do the same thing, myself.

Clearwire is expected to release full 4th Quarter results prior to the February 17th Q4-2011 Results call.


Source: http://corporate.cle...eleaseID=641792


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