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United States Cellular (USM) Q1 Earnings Top, Revenues Lag
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United States Cellular Corp. (USM - Free Report) – a subsidiary of Telephone & Data Systems Inc. (TDS - Free Report) – posted mixed financial results in the first quarter of 2017. While the top line missed the Zacks Consensus Estimate, the bottom line surpassed the mark.
GAAP net income came in at $26 million or 31 cents per share compared with a net income of $9 million or 10 cents per share in the year-ago quarter. Quarterly adjusted earnings per share of 18 cents were well above the Zacks Consensus Estimate of 11 cents per share.
Quarterly total revenue of $936 million was down 3% year over year missing the Zacks Consensus Estimate of $958.9 million. Quarterly Service revenues decreased 3% to $746 million. Revenues from Equipment sales dropped 4% to $190 million.
Quarterly operating expenses decreased 8% to $882 million. Operating income was $54 million compared with $10 million in the prior-year quarter. Total cell sites in service were 6,417 compared with 6,415 at the end of 2016. Total company owned towers were 4,041 compared with 4,040 at the end of 2016.
Cash Flow
In the quarter under review, cash from operations came in at $61 million compared with $163 million in the prior-year quarter. Quarterly free cash flow was a negative $27 million compared with a positive $60 million in the year-ago quarter.
Liquidity
United States Cellular exited the first quarter of 2017 with cash and cash equivalents of $572 million compared with $586 million at the end of 2016. At the end of the reported quarter, total debt was $1,627 million compared with $1,629 million at the end of 2016. The debt-to-capitalization ratio at the end of first-quarter 2017 was 0.30 compared with 0.31 at 2016-end.
ARPU & Churn
Quarterly postpaid ARPU (average revenue per user) increased to $45.42 from $45.19 at the end of 2016. Postpaid ARPA (average revenue per account) was $121.88 as against $120.67 at the end of 2016. Postpaid churn declined to 1.29% from 1.41% recorded at the end of 2016. Prepaid ARPU increased to $33.66 from $33.25 recorded at the end of 2016. Prepaid churn increased to 5.69% in the reported quarter from 5.44% at 2016-end.
Subscriber Statistics
United States Cellular exited the first quarter of 2017 with a subscriber base of 4,996,000 compared with 5,031,000 at the end of 2016. Postpaid subscriber base totaled 4,455,000 compared with 4,482,000 at 2016-end. Meanwhile, prepaid subscriber base totaled 480,000 compared with 484,000 at the end of 2016. In the reported quarter, United States Cellular lost a net of 27,000 postpaid subscribers compared with the addition of 45,000 customers in the year-ago quarter. The company lost 4,000 prepaid customers in the same quarter as opposed to a net gain of 12,000 users in the prior-year quarter.
Guidance for 2017
United States Cellular expects total operating revenue in the band of $3,800–$4,000 million. Adjusted EBITDA is projected at $700–$800 million while capital expenditure is estimated at around $500 million. The company projects operating cash flow in the range of $550--$650 million.
United States Cellular Corporation Price, Consensus and EPS Surprise
United States Cellular acquired 600-MHz low-band wireless frequencies that were auctioned recently by the FCC. Other major companies that took part in the auction were AT&T Inc. (T - Free Report) and T-Mobile US Inc. (TMUS - Free Report) to name a few. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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United States Cellular (USM) Q1 Earnings Top, Revenues Lag
United States Cellular Corp. (USM - Free Report) – a subsidiary of Telephone & Data Systems Inc. (TDS - Free Report) – posted mixed financial results in the first quarter of 2017. While the top line missed the Zacks Consensus Estimate, the bottom line surpassed the mark.
GAAP net income came in at $26 million or 31 cents per share compared with a net income of $9 million or 10 cents per share in the year-ago quarter. Quarterly adjusted earnings per share of 18 cents were well above the Zacks Consensus Estimate of 11 cents per share.
Quarterly total revenue of $936 million was down 3% year over year missing the Zacks Consensus Estimate of $958.9 million. Quarterly Service revenues decreased 3% to $746 million. Revenues from Equipment sales dropped 4% to $190 million.
Quarterly operating expenses decreased 8% to $882 million. Operating income was $54 million compared with $10 million in the prior-year quarter. Total cell sites in service were 6,417 compared with 6,415 at the end of 2016. Total company owned towers were 4,041 compared with 4,040 at the end of 2016.
Cash Flow
In the quarter under review, cash from operations came in at $61 million compared with $163 million in the prior-year quarter. Quarterly free cash flow was a negative $27 million compared with a positive $60 million in the year-ago quarter.
Liquidity
United States Cellular exited the first quarter of 2017 with cash and cash equivalents of $572 million compared with $586 million at the end of 2016. At the end of the reported quarter, total debt was $1,627 million compared with $1,629 million at the end of 2016. The debt-to-capitalization ratio at the end of first-quarter 2017 was 0.30 compared with 0.31 at 2016-end.
ARPU & Churn
Quarterly postpaid ARPU (average revenue per user) increased to $45.42 from $45.19 at the end of 2016. Postpaid ARPA (average revenue per account) was $121.88 as against $120.67 at the end of 2016. Postpaid churn declined to 1.29% from 1.41% recorded at the end of 2016. Prepaid ARPU increased to $33.66 from $33.25 recorded at the end of 2016. Prepaid churn increased to 5.69% in the reported quarter from 5.44% at 2016-end.
Subscriber Statistics
United States Cellular exited the first quarter of 2017 with a subscriber base of 4,996,000 compared with 5,031,000 at the end of 2016. Postpaid subscriber base totaled 4,455,000 compared with 4,482,000 at 2016-end. Meanwhile, prepaid subscriber base totaled 480,000 compared with 484,000 at the end of 2016. In the reported quarter, United States Cellular lost a net of 27,000 postpaid subscribers compared with the addition of 45,000 customers in the year-ago quarter. The company lost 4,000 prepaid customers in the same quarter as opposed to a net gain of 12,000 users in the prior-year quarter.
Guidance for 2017
United States Cellular expects total operating revenue in the band of $3,800–$4,000 million. Adjusted EBITDA is projected at $700–$800 million while capital expenditure is estimated at around $500 million. The company projects operating cash flow in the range of $550--$650 million.
United States Cellular Corporation Price, Consensus and EPS Surprise
United States Cellular Corporation Price, Consensus and EPS Surprise | United States Cellular Corporation Quote
Recent Development
United States Cellular acquired 600-MHz low-band wireless frequencies that were auctioned recently by the FCC. Other major companies that took part in the auction were AT&T Inc. (T - Free Report) and T-Mobile US Inc. (TMUS - Free Report) to name a few. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>