Virgin Mobile USA 2nd-quarter profit halves
NEW YORK (Reuters) - Virgin Mobile USA Inc
The company said its profit would decline further and it might only break even in the current quarter, but it said revenue declines would stabilize in the quarter, sending its shares up nearly 10 percent to $3 from their close of $2.74 on the New York Stock Exchange.
Virgin Mobile USA said new service plans, handsets, increased distribution and operational cost savings it has put in place in recent quarters would "enable it to continue to improve business trends in the second half of 2008, and position the Company for growth in 2009."
The company said its net customer numbers would improve in the current quarter and could range from a net loss of 20,000 customers to a gain of 20,000 customers.
On a net basis, Virgin Mobile USA said it lost 111,273 customers in the second quarter. Gross customer additions, excluding customer cancellations, declined to 728,370 from 785,236.
Virgin Mobile USA, which has agreed to buy smaller rival Helio, said second-quarter profit fell to $3.5 million, or 7 cents per share, from $7 million, or 14 cents a share, in the year-ago quarter. Service revenue dropped to .....continued below
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$291.4 million from $309.7 million.Total operating revenue fell to $317.4 million compared with average analyst expectations for $312 million, according to Reuters Estimates.
Average monthly revenue per user fell 7.9 percent from a year ago to $19.32. Virgin Mobile USA users buy credit to pay for calls in advance rather than pay monthly bills.
The company said customers used their phones less and tended to favour lower-cost text messaging over voice services. It expects average monthly revenue per user to improve in the second half of the year as customers opt for new services.
It said current-quarter profit could range from break-even on a per-share basis to 3 cents per share. It forecast service revenue in a range of $285 million to $295 million.
The venture of Richard Branson’s Virgin
(Reporting by Sinead Carew; editing by Jeffrey Benkoe, Gary Hill)
NEW YORK (Reuters) - Virgin Mobile USA Inc
The company said its profit would decline further and it might only break even in the current quarter, but it said revenue declines would stabilize in the quarter, sending its shares up nearly 10 percent to $3 from their close of $2.74 on the New York Stock Exchange.
Virgin Mobile USA said new service plans, handsets, increased distribution and operational cost savings it has put in place in recent quarters would "enable it to continue to improve business trends in the second half of 2008, and position the Company for growth in 2009."
The company said its net customer numbers would improve in the current quarter and could range from a net loss of 20,000 customers to a gain of 20,000 customers.
On a net basis, Virgin Mobile USA said it lost 111,273 customers in the second quarter. Gross customer additions, excluding customer cancellations, declined to 728,370 from 785,236.
Virgin Mobile USA, which has agreed to buy smaller rival Helio, said second-quarter profit fell to $3.5 million, or 7 cents per share, from $7 million, or 14 cents a share, in the year-ago quarter. Service revenue dropped to $291.4 million from $309.7 million.
Total operating revenue fell to $317.4 million compared with average analyst expectations for $312 million, according to Reuters Estimates.
Average monthly revenue per user fell 7.9 percent from a year ago to $19.32. Virgin Mobile USA users buy credit to pay for calls in advance rather than pay monthly bills.
The company said customers used their phones less and tended to favour lower-cost text messaging over voice services. It expects average monthly revenue per user to improve in the second half of the year as customers opt for new services.
It said current-quarter profit could range from break-even on a per-share basis to 3 cents per share. It forecast service revenue in a range of $285 million to $295 million.
The venture of Richard Branson’s Virgin
(Reporting by Sinead Carew; editing by Jeffrey Benkoe, Gary Hill)
© 2008 Reuters Click for restrictions
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