Leap Wireless Q3 Misses; Cuts Full Year Sub Growth View

Echoing concerns triggered earlier today by Metro PCS (PCS), Leap Wireless (LEAP) this afternoon posted disappointing Q3 results and reduced its full year forecast for subscriber growth.

Leap posted Q3 revenue of $599.5 million, up 20.7%, but below the Street consensus forecast of $619.7 million. The company posted a loss for the quarter of 85 cents a share, worse than the Street consensus view of a loss of 52 cents. Leap reported 116,182 net customers adds in the quarter, down 25.4% from the number added in the comparable quarter last year. ARPU fell to $39.60, from $42.95, a decline of 7.8%. Churn increased to 5.4%, from 4.2%. At the end of the quarter, LEAP had 4.66 million customers.

For all of 2009, the company now sees net customer additions of 1.05 million to 1.3 million, well below previous guidance of 1.5 million. The company repeated a previous forecast for full-year adjusted OIBDA (operating income before depreciation and amortization) of $500 million.

The company noted that it is seeing an “increasingly competitive operating environment” as well as “sustained economic pressure our our key customer segments.”

Shares of both PCS and LEAP lost ground in the regular session on comments on the PCS conference call this morning suggesting continuing concerns about falling ARPU as competition for pre-paid wireless customers intensifies. In the regular session, LEAP fell 90 cents, or 6.5%, to $13.03, while PCS dropped 61 cents, or 9.2%, to $6.01.

In late trading, LEAP has bounced back 30 cents to $13.33, while PCS is unchanged.