) pre-announced 1Q results including ~300k net adds, Q/Q ARPU growth, less than 3.5% churn and for “EBITDA to reflect strong customer activity.” Morgan Stanley said that accordingly, higher smartphone upgrades drove EBITDA margin 130 and 101 bps below its and consensus' estimates, respectively, to 16.6% (margins declined Q/Q and Y/Y) as management focuses on improving churn and increasing ARPU through greater smartphone loading. “We were encouraged to see better than expected churn at 3.1% (MSe 3.4% vs. consensus' 3.5%), but we note that much of the decline was due to the elimination of false churn. Although ARPU came in below our expectations, it beat consensus and increased Q/Q and Y/Y. Similar to MetroPCS and Sprint, Leap saw strong prepaid net adds, which came in 22k and 36k above our and consensus' estimates at 331k. We note that the surprise was driven by broadband net adds of 31k vs. MSe -14k, while voice net adds came in below our estimates (300k vs. MSe 323k).” Leap Wireless closed yesterday at $15.07.