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United States Cellular (USM) Q2 Earnings Beat, Guidance Up
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United States Cellular Corporation (USM - Free Report) reported impressive second-quarter 2018 results wherein both the top and the bottom line surpassed the respective Zacks Consensus Estimate.
Revenues
Quarterly total operating revenues increased 1% year over year to $974 million driven by growth in both its operating segments. The figure surpassed the Zacks Consensus Estimate of $961 million. While Service revenues of $741 million remained almost flat year over year, revenues from Equipment sales were up 5% to $233 million driven by more sales of higher-priced devices and accessories.
Net Income
Net income for the quarter improved to $49 million or 56 cents per share from $12 million or 14 cents per share in the year-ago quarter primarily due to lower operating expenses.
Adjusted earnings per share came in at 47 cents compared with 17 cents in the year-ago quarter. The bottom line comfortably beat the Zacks Consensus Estimate of 19 cents.
United States Cellular Corporation Price, Consensus and EPS Surprise
Total operating expenses declined 4% year over year to $918 million. Operating income came in at $56 million compared with $5 million in the prior-year quarter.
While total cell sites in service were 6,478 at the quarter end compared with 6,473 in the prior-year quarter, company-owned towers were 4,105 compared with 4,099.
While quarterly postpaid ARPU (average revenue per user) increased to $44.74 from $44.60, postpaid ARPA (average revenue per account) was $118.57 compared with $119.73. Postpaid churn slightly rose to 1.19% from 1.13% in the year-ago period. Prepaid ARPU decreased to $32.32 from $33.52 and prepaid churn fell to 4.83% from 4.93%.
Cash Flow & Liquidity
For the first six months of 2018, cash from operations aggregated $365 million compared with $220 million in the year-ago period. Non-GAAP free cash flow for the first half of the year was $192 million compared with $65 million in the year-ago period.
As on Jun 30, 2018, United States Cellular had cash and cash equivalents of $596 million with net long-term debt of $1,614 million.
2018 Guidance Raised
For full-year 2018, United States Cellular raised guidance on the back of solid second-quarter results. It now expects total operating revenues in the band of $3,925-$4,025 million, up from previous range of $3,850-$4,050 million. Adjusted EBITDA is projected in the range of $850-$950 million, up from $765-$915 million expected earlier. The company anticipates adjusted OIBDA in the range of $700-$800 million, up from the previous guidance of $625-$775 million. Capital expenditures remain unchanged and is expected to be between $500 and $550 million.
Zacks Rank & Stocks to Consider
United States Cellular currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Micron Technology, Inc. (MU - Free Report) and Motorola Solutions, Inc. (MSI - Free Report) . While Comtech and Micron sport a Zacks Rank #1 (Strong Buy), Motorola carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average being 123.7%.
Micron has a long-term earnings growth expectation of 8.2%. It beat earnings estimates in each of the trailing four quarters, the average being 5.9%.
Motorola has a long-term earnings growth expectation of 8.5%. It beat earnings estimates in each of the trailing four quarters, the average being 12.1%.
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United States Cellular (USM) Q2 Earnings Beat, Guidance Up
United States Cellular Corporation (USM - Free Report) reported impressive second-quarter 2018 results wherein both the top and the bottom line surpassed the respective Zacks Consensus Estimate.
Revenues
Quarterly total operating revenues increased 1% year over year to $974 million driven by growth in both its operating segments. The figure surpassed the Zacks Consensus Estimate of $961 million. While Service revenues of $741 million remained almost flat year over year, revenues from Equipment sales were up 5% to $233 million driven by more sales of higher-priced devices and accessories.
Net Income
Net income for the quarter improved to $49 million or 56 cents per share from $12 million or 14 cents per share in the year-ago quarter primarily due to lower operating expenses.
Adjusted earnings per share came in at 47 cents compared with 17 cents in the year-ago quarter. The bottom line comfortably beat the Zacks Consensus Estimate of 19 cents.
United States Cellular Corporation Price, Consensus and EPS Surprise
United States Cellular Corporation Price, Consensus and EPS Surprise | United States Cellular Corporation Quote
Other Quarter Details
Total operating expenses declined 4% year over year to $918 million. Operating income came in at $56 million compared with $5 million in the prior-year quarter.
While total cell sites in service were 6,478 at the quarter end compared with 6,473 in the prior-year quarter, company-owned towers were 4,105 compared with 4,099.
While quarterly postpaid ARPU (average revenue per user) increased to $44.74 from $44.60, postpaid ARPA (average revenue per account) was $118.57 compared with $119.73. Postpaid churn slightly rose to 1.19% from 1.13% in the year-ago period. Prepaid ARPU decreased to $32.32 from $33.52 and prepaid churn fell to 4.83% from 4.93%.
Cash Flow & Liquidity
For the first six months of 2018, cash from operations aggregated $365 million compared with $220 million in the year-ago period. Non-GAAP free cash flow for the first half of the year was $192 million compared with $65 million in the year-ago period.
As on Jun 30, 2018, United States Cellular had cash and cash equivalents of $596 million with net long-term debt of $1,614 million.
2018 Guidance Raised
For full-year 2018, United States Cellular raised guidance on the back of solid second-quarter results. It now expects total operating revenues in the band of $3,925-$4,025 million, up from previous range of $3,850-$4,050 million. Adjusted EBITDA is projected in the range of $850-$950 million, up from $765-$915 million expected earlier. The company anticipates adjusted OIBDA in the range of $700-$800 million, up from the previous guidance of $625-$775 million. Capital expenditures remain unchanged and is expected to be between $500 and $550 million.
Zacks Rank & Stocks to Consider
United States Cellular currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Micron Technology, Inc. (MU - Free Report) and Motorola Solutions, Inc. (MSI - Free Report) . While Comtech and Micron sport a Zacks Rank #1 (Strong Buy), Motorola carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average being 123.7%.
Micron has a long-term earnings growth expectation of 8.2%. It beat earnings estimates in each of the trailing four quarters, the average being 5.9%.
Motorola has a long-term earnings growth expectation of 8.5%. It beat earnings estimates in each of the trailing four quarters, the average being 12.1%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>