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Shares in Western Wireless, Meteor's parent company, tumbled by more than 40 percent on Friday after the company shed 17,000 subscribers.
Western Wireless, which trades under the brand Cellular One in the US, said that after the lost subscribers the firm had only 1,159,500 North American customers. Not only was the news devastating for Western Wireless shares, but the company's poor figures dragged down Sprint PCS, AT&T Wireless and the Philadelphia wireless telecommunications index, a proxy for the sector, which fell by seven percent on Friday.
After the company's first-quarter results were released, Merrill Lynch cut its mid-term investment rating on Western Wireless to "reduce/sell" from "neutral," a further blow to the firm's stock. Western Wireless' shares are now trading at around USD3.35, down from their year-ago high of around USD44.45.
In early trading in New York on Monday, the company's shares were on the rebound, up almost 10 percent to USD3.67.
Other figures released by the firm said that first-quarter losses came to USD96 million, or USD1.22 a share, compared with losses of USD22.9 million, or USD0.29 a share in the same period last year. The results include a non-cash provision for income taxes of USD78.9 million, due to changes in accounting rules adopted this year. On the bright side, revenue jumped 23 percent from a year ago to USD290.7 million.
EBITDA from the domestic business was USD84.9 million, a 6.7 percent decline from year-earlier levels, and the company said its ongoing cost-control efforts resulted in an improvement in this quarter's EBITDA margin to 42.3 percent.
Western Wireless International (WWI), the branch of the company that controls Meteor in Ireland as well as subsidiaries in Austria, Slovenia, Iceland, the Ivory Coast, Bolivia, Georgia, Croatia, Ghana and Haiti, fared somewhat better. WWI said that it had picked up 108,100 customers outside the US, bringing total international customers to approximately 1.67 million.
"We are very pleased with the progress in all of our operating companies this quarter. The teams we have assembled in each country have done a tremendous job balancing customer growth and controlling costs, allowing us to make excellent progress toward our stated goal this year of significantly lowering our international EBITDA losses," said Brad Horwitz, president of Western Wireless International.
The EBITDA loss for Western Wireless International's consolidated operations improved to USD10.8 million for the quarter. This compares to a consolidated international EBITDA loss for the fourth quarter 2001 of USD38.5 million. Western Wireless did not give financial details for its Irish operation. Consolidated revenue for WWI was USD79.4 million for the quarter, up from USD12.8 million in the first quarter of 2001.
In Ireland, Meteor holds a three percent share of the 2.9 million mobile phone subscriber market in Ireland and employs over 300 people here. Meteor is 81.5 percent owned by WWI after Sean Finlay's RFCommunications sold its 26 percent stake in the business over a period of five years. Soros Fund Management holds a further 18 percent of Meteor.
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