Boingo Wireless ( Nasdaq - WIFI ) -- Static

Boingo Wireless (WIFI $6.75) reported lower than expected Q2 results.  The main culprit was the company's legacy consumer business.  Advertising revenue failed to expand, as well.  The core WiFi hotspot operation continued to grow at a superior pace.  The company expanded its network of affiliated locations to more than 550,000 worldwide.  It also signed up several new partnerships, where it retains an economic interest.  Wendy's 6,500 unit restaurant chain was among them.  Income declined a penny sequentially but rose 20% year to year to $.06 a share.  Total sales gained 11% to $24.3 million. 

Advertising revenue is poised to re-accelerate in Q4.  Boingo purchased an advertising specialist in the June period.  That group currently is being integrated and expanded.  By the December quarter the unit is likely to start handling the advertising functions that previously were outsourced.  That promises to boost revenue directly.  Margins should benefit, as well.  The closer integration also could yield better overall performance.  The consumer operation is being made more profitable, too.  That effort has been underway for a while.  Pricing adjustments have caused casual users to leave.  But they are being replaced by higher margin subscription customers.

The venue business remains strong.  Boingo continues to win 75% of the projects it bids on.  Besides Wendy's, the company recently landed a 2,000 store retailer.  Boingo will include sophisticated software in that operation, allowing the retailer to monitor where customers are heading on the Internet when they are in the stores.  If they're checking out product reviews or pricing at on-line retailers, the system will be programmed to intervene with special offers to try to keep the sale in house.  That could help thwart the problem of "show-rooming."  If the technique works substantial growth could be realized by penetrating other retail accounts.

We are reducing our 2012 earnings estimate a nickel to $.30 a share to reflect the Q2 slowdown, and Q3 transition effort.  A solid Q4 rebound appears achievable, laying the foundation for resumed expansion next year.

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Boingo Wireless ( Nasdaq - WIFI ) -- Solid Q1 Results

Boingo Wireless (WIFI $10.00) reported excellent on target Q1 results.  Earnings rose 40% to $.07 a share.  Sales advanced 15% to $24.2 million.  The company's legacy consumer business continued to slide as more locations provide free WiFi service.  On the plus side, Boingo is the leading provider of those WiFi systems.  Some of those sites still charge users for access, dividing the revenues with Boingo in some cases.  More often the company is paid to install and manage the networks.  Tablet and smart phone traffic is continuing to rise faster than cell phone networks can keep up.  A rising percentage of that activity is being offloaded onto Wifi hubs like those the company provides.  Penetration of international markets promises to leverage performance in upcoming periods.  Formal relationships with the cell phone networks could accelerate growth further.  Our estimates are unchanged.  Contracts with one or more major carrier could propel results substantially higher.  Trials are likely to begin later in 2012. 

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