Virgin Mobile sinks with wider 3Q loss
Business Law
Despite an analysts' upgrade, shares of Virgin Mobile USA Inc. fell Friday to their lowest point since the company's recent trading debut after the company said its third-quarter loss widened as operating expenses rose.
The wireless service provider's shares fell $1.54, or 14.4 percent, to $9.19 Friday. Earlier, the shares traded as low as $8.07.
Virgin Mobile said late Thursday that its third-quarter loss widened to $7.3 million, compared with a loss of $5.1 million in the year-ago quarter.
The company said its pro-forma loss totaled 15 cents per share, compared with a loss of 10 cents per share in the year-ago period.
Revenue rose year over year to $319.5 million from $271 million, as an increase in service revenue overshadowed a decline in equipment sales.
In a note to clients Friday, Stanford Group Company analyst Michael Gary Nelson upgraded the stock to "Hold" from "Sell," saying challenges the company faces -- such as increasing competition -- are well balanced with opportunities for raising shareholder value.
The analyst called Virgin Mobile's third-quarter results "mixed" and its fourth-quarter outlook for between 350,000 and 400,000 net customer additions "weak." But he also said its guidance for 2008 EBITDA -- or earnings before interest, taxes, depreciation and amortization -- of between $155 million and $175 million is strong.
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