Trying to rebound from a tumultuous year, wireless broadband provider Clearwire just provided a sneak peek at its fourth-quarter financial performance, saying it expects record revenues of $362 million — more than double its result from a year ago.
Separately, Clearwire announced plans to raise more money through a debt offering, saying its Clearwire Communications LLC operating subsidiary will offer $300 million in senior secured notes.
Clearwire says it ended the fourth quarter with $1.11 billion in cash and equivalents, up from $711 million at the end of the third quarter.
As of the end of the fourth quarter, the Bellevue-based company’s overall subscribers were 10.4 million, an increase of 140 percent from the prior year, according to the company’s report of selected preliminary results this morning. However, much of that growth came from wholesale subscribers, primarily customers who use the Clearwire service through Sprint.
Those wholesale subscribers rose to 9.1 million, or an 11 percent increase compared with the third quarter of 2011, while retail subscribers — people who purchase 4G wireless broadband service directly from Clearwire — came in around 1.3 million, essentially flat or down compared with the 1.32 million reported by Clearwire at the end of the third quarter.
Sprint, Clearwire’s majority owner, threw the company a lifeline last year with an agreement to provide Clearwire with as much as $1.6 billion over the next four years. The extra money is designed to help address Clearwire’s cash crunch as it shifts from WiMAX — where the company made its big early bets – to the competing LTE wireless standard. The companies also agreed at the time ClearWire’s WiMAX network would operate through at least 2015.
However, the long-term relationship with Sprint remains a source of concern for Clearwire investors. Wholesale customers such as Time Warner and Comcast have said they plan to end their wholesale agreements with Clearwire, and the shift to LTE is a major transition. Clearwire yesterday announced a new wholesale agreement with Simplexity MVNO Services.