NII Holdings swings to surprise Q4 loss on higher costs

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NII Holdings Inc. swung to a surprise fourth-quarter loss as higher operating costs masked revenue and subscriber growth.

Looking ahead, NII forecast 2012 revenue of about $7.1 billion. Wall Street analysts currently expect revenue of $7.34 billion, according to a poll conducted by Thomson Reuters. The company also predicted it will add roughly 1.4 million subscribers this year, versus the 1.7 million subscribers that were added in 2011.
“2012 will be a transformative year for our business as we invest in key initiatives that will enable NII to drive more profitable growth in the future,” said Chief Executive Steve Dussek.
The company, which provides wireless service under the Nextel brand in several Latin American countries, has seen its revenue rise in recent quarters alongside subscriber growth.
The company added 466,600 net subscribers during the quarter, bringing its subscriber base to 10.7 million, up 19% from a year earlier. Churn, a measure of subscriber cancellations, came in at 1.78% compared with 1.6% a year ago.
NII reported a loss of $8.7 million, or 5 cents a share, compared with a year-earlier profit of $98.6 million, or 57 cents a share. Revenue rose 5% to $1.6 billion. Analysts polled by Thomson Reuters were looking for a per-share profit of 18 cents on $1.68 billion in revenue.
Operating margin narrowed sharply to 7.3% from 15.1%, reflecting an increase in costs related to the deployment of new third-generation networks, among other impacts. Shares closed Wednesday at $23.51 and were inactive premarket.