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U.S. Cellular (USM) Q4 Loss Narrower Than Expected, Revenue Down
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United States Cellular Corporation (USM - Free Report) reported soft fourth-quarter results, with the top line missing the Zacks Consensus Estimate and the bottom line beating the same. The Chicago based leading full-service wireless carrier reported lower revenues year over year as declining retail connections and reductions in equipment sales hampered top-line performance.
Net Income
U.S. Cellular reported a net loss of $28 million or a loss of 33 cents against a net income of $27 million or an income of 31 cents per share in the year-ago quarter. The loss was narrower than the Zacks Consensus Estimate by 5 cents. Top-line contraction combined with higher administrative and interest expenses hurt the bottom line during the quarter.
For 2022, net income stands at $30 million or 35 cents per share compared with respective tallies of $155 million or $1.77 per share in the previous year.
United States Cellular Corporation Price, Consensus and EPS Surprise
Quarterly total operating revenues were $1,048 million, down 2% from the prior year. Declining demand trends in Service and Equipment Sales hampered the company’s fourth-quarter revenues. The top line missed the consensus estimate by $44 million.
Revenues from the Service segment declined by 1% to $774 million. Equipment sales declined 4% to $274 million from $286 million in the prior-year quarter. Revenues were hurt by a net loss of 17,000 connections, largely due to the decline of smartphone connections. Total cell sites in service were 6,945 in the reported quarter compared with 6,898 in the year-ago period. Company-owned towers numbered at 4,336, up from the prior-year quarter’s levels of 4,301. Growth in tower rental revenues partially cushioned the top line.
As of Dec 31, 2022, postpaid average revenue per user (ARPU) increased to $50.60 from $48.62 and postpaid average revenue per account (ARPA) grew to $130.97 from $127.14 in the previous-year period. Postpaid churn rate was flat at 1.35%. Prepaid ARPU declined year over to $33.34 from $34.53. Prepaid churn rate was down to 4.11% compared with the prior-year quarter’s levels of 4.39%.
In 2022, the company’s revenues aggregated $4,169 million compared with $4,122 million in 2021.
Other Quarterly Details
Total operating expenses grew 1% to $1,075 million. Operating loss was $27 million against an operating income of $5 million in the year-ago quarter. Adjusted EBITDA (non-GAAP) came in at $202 million compared with $225 million in the prior-year quarter. Adjusted OIBDA (non-GAAP) was $163 million compared with $181 million in the prior-year quarter.
Cash Flow & Liquidity
In 2022, U.S. Cellular generated $832 million of cash from operating activities compared with $802 million in the prior-year period. Free cash flow (non-GAAP) stood at $208 million compared with $69 million in the prior-year quarter. As of Dec 31, 2022, the firm had $273 million in cash and cash equivalents and $3,187 million in long-term debt, compared to $156 million and $2,728 million, respectively, in 2021.
Outlook
For the year 2023, U.S. Cellular expects service revenues in the range of $3,050-$3150 million. Management estimates adjusted EBITDA (non-GAAP) in the band of $875 to $1025 million and adjusted OIBDA (non-GAAP) within $725-$875 million. Capital expenditures are anticipated between $600 million and $700 million.
U.S Cellular’s vision of multi-year network modernization is well on track. Customer growth, cost optimization, investment in 5G programs, tower revenue growth, fixed wireless expansion and growth in Business and Government & loT will remain the company’s priority in 2023.
T-Mobile US, Inc. (TMUS - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 67.6%, on average, in the trailing four quarters. Earnings estimates for TMUS for the current year stands at $6.67 per share.
T-Mobile US, Inc. is a national wireless service provider. The company offers its services under the T-Mobile, Metro by T-Mobile and Sprint brands. T-Mobile, through its subsidiaries, provides wireless services for branded postpaid and prepaid, and wholesale customers.
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 14.17%, on average, in the trailing four quarters. Earnings estimates for ANET for the current year stand at $5.76 per share.
Arista Networks, Inc. is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 9.1%, on average, in the trailing four quarters. In the last reported quarter, it delivered an earnings surprise of 27.27%.
Viavi Solutions Inc. is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. The product portfolio of the company offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks.
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U.S. Cellular (USM) Q4 Loss Narrower Than Expected, Revenue Down
United States Cellular Corporation (USM - Free Report) reported soft fourth-quarter results, with the top line missing the Zacks Consensus Estimate and the bottom line beating the same. The Chicago based leading full-service wireless carrier reported lower revenues year over year as declining retail connections and reductions in equipment sales hampered top-line performance.
Net Income
U.S. Cellular reported a net loss of $28 million or a loss of 33 cents against a net income of $27 million or an income of 31 cents per share in the year-ago quarter. The loss was narrower than the Zacks Consensus Estimate by 5 cents. Top-line contraction combined with higher administrative and interest expenses hurt the bottom line during the quarter.
For 2022, net income stands at $30 million or 35 cents per share compared with respective tallies of $155 million or $1.77 per share in the previous year.
United States Cellular Corporation Price, Consensus and EPS Surprise
United States Cellular Corporation price-consensus-eps-surprise-chart | United States Cellular Corporation Quote
Revenues
Quarterly total operating revenues were $1,048 million, down 2% from the prior year. Declining demand trends in Service and Equipment Sales hampered the company’s fourth-quarter revenues. The top line missed the consensus estimate by $44 million.
Revenues from the Service segment declined by 1% to $774 million. Equipment sales declined 4% to $274 million from $286 million in the prior-year quarter. Revenues were hurt by a net loss of 17,000 connections, largely due to the decline of smartphone connections. Total cell sites in service were 6,945 in the reported quarter compared with 6,898 in the year-ago period. Company-owned towers numbered at 4,336, up from the prior-year quarter’s levels of 4,301. Growth in tower rental revenues partially cushioned the top line.
As of Dec 31, 2022, postpaid average revenue per user (ARPU) increased to $50.60 from $48.62 and postpaid average revenue per account (ARPA) grew to $130.97 from $127.14 in the previous-year period. Postpaid churn rate was flat at 1.35%. Prepaid ARPU declined year over to $33.34 from $34.53. Prepaid churn rate was down to 4.11% compared with the prior-year quarter’s levels of 4.39%.
In 2022, the company’s revenues aggregated $4,169 million compared with $4,122 million in 2021.
Other Quarterly Details
Total operating expenses grew 1% to $1,075 million. Operating loss was $27 million against an operating income of $5 million in the year-ago quarter. Adjusted EBITDA (non-GAAP) came in at $202 million compared with $225 million in the prior-year quarter. Adjusted OIBDA (non-GAAP) was $163 million compared with $181 million in the prior-year quarter.
Cash Flow & Liquidity
In 2022, U.S. Cellular generated $832 million of cash from operating activities compared with $802 million in the prior-year period. Free cash flow (non-GAAP) stood at $208 million compared with $69 million in the prior-year quarter. As of Dec 31, 2022, the firm had $273 million in cash and cash equivalents and $3,187 million in long-term debt, compared to $156 million and $2,728 million, respectively, in 2021.
Outlook
For the year 2023, U.S. Cellular expects service revenues in the range of $3,050-$3150 million. Management estimates adjusted EBITDA (non-GAAP) in the band of $875 to $1025 million and adjusted OIBDA (non-GAAP) within $725-$875 million. Capital expenditures are anticipated between $600 million and $700 million.
U.S Cellular’s vision of multi-year network modernization is well on track. Customer growth, cost optimization, investment in 5G programs, tower revenue growth, fixed wireless expansion and growth in Business and Government & loT will remain the company’s priority in 2023.
Zacks Rank & Stocks to Consider
U.S Cellular currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
T-Mobile US, Inc. (TMUS - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 67.6%, on average, in the trailing four quarters. Earnings estimates for TMUS for the current year stands at $6.67 per share.
T-Mobile US, Inc. is a national wireless service provider. The company offers its services under the T-Mobile, Metro by T-Mobile and Sprint brands. T-Mobile, through its subsidiaries, provides wireless services for branded postpaid and prepaid, and wholesale customers.
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 14.17%, on average, in the trailing four quarters. Earnings estimates for ANET for the current year stand at $5.76 per share.
Arista Networks, Inc. is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 9.1%, on average, in the trailing four quarters. In the last reported quarter, it delivered an earnings surprise of 27.27%.
Viavi Solutions Inc. is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. The product portfolio of the company offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks.