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U.S. Cellular's Q3 Earnings Beat Estimate, Revenues Decline Y/Y
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U.S. Cellular Corporation (USM - Free Report) reported mixed third-quarter 2024 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same. The company reported a revenue decline year over year, owing to a decrease in postpaid and prepaid retail connections.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
However, increasing customer growth in fixed wireless businesses partially supported the top line. Growth in postpaid average revenues per user and lower postpaid churn rate are tailwinds.
USM’s Net Income
The company reported a net loss of $79 million or a loss of 92 cents per share. Net income, excluding license impairment charges, was $23 million or 26 cents, matching the prior-year quarter’s tally. The bottom line beat the Zacks Consensus Estimate by 8 cents.
United States Cellular Corporation Price, Consensus and EPS Surprise
The company generated $922 million in operating revenues compared with $963 million in the prior-year quarter. Net sales were negatively affected by a decline in postpaid and prepaid retail connections. The top line missed the Zacks Consensus Estimate of $941 million.
Service revenues decreased to $747 million from $762 million in the prior-year quarter, beating the Zacks Consensus Estimate of $742.31 million. Equipment sales registered $175 million in revenues compared with $201 million in the prior-year quarter.
Fixed wireless customers grew 32% year over year to 140,000. Tower business witnessed healthy momentum during the quarter and registered revenues of $59 million, up 2% year over year. Management’s effort to diversify its third-party customer base is a positive factor.
Handset connections were 84,000, matching the prior-year quarter’s figure. Handset churn rate was 1.07% compared to 1.11% a year ago. Connected devices were 39,000, down from 44,000 a year ago, while the churn rate was 2.47%, down from 2.64% in the year-ago quarter. Total postpaid connections declined to 3,999,000 from 4,159,000 in the year-earlier quarter. Total prepaid connections stood at 452,000, down from 462,000 in the year-ago quarter.
Postpaid average revenues per account improved to $131.81 from $130.91 in the year-ago quarter, with postpaid churn rates of 1.25% and 1.30%, respectively. Postpaid ARPU rose to $52.04 from $51.11 a year ago. Prepaid ARPU was $32.01, down from $33.44 in the prior-year quarter. The prepaid churn rate decreased to 3.30% from 3.68% recorded in the year-ago quarter.
Quarterly Details of USM
Adjusted EBITDA in the quarter stood at $269 million, up from $263 million in the prior-year quarter. Adjusted OIBDA was $222 million, up from $220 million in the year-earlier quarter.
Total operating expenses declined to $1.01 billion, up 12% year over year. The company reported an operating loss of $90 million against an income of $57 million.
U.S. Cellular's Cash Flow & Liquidity
In the September quarter, U.S. Cellular generated $245 million of cash from operating activities compared with $329 million in the year-ago quarter.
As of Sept. 30, 2024, the company had $272 million in cash and cash equivalents and $2.88 billion in long-term debt.
USM’s Outlook
For 2024, U.S. Cellular estimates service revenues in the range of $2,950-$3,000 million. Adjusted OIBDA is estimated within the range of $800-$875 million. The company expects adjusted EBITDA guidance at about $970-$1,045 million and capital expenditure is projected in the band of $550-$600 million.
Zacks Rank & Other Stocks to Consider
U.S. Cellular currently sports a Zacks Rank #3 (Hold).
In the last reported quarter, ANET delivered an earnings surprise of 8.25%. It provides 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.
Ubiquiti Inc. (UI - Free Report) currently sports a Zacks Rank of 1. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
UI’s excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank #2 at present. In the last reported quarter, the company delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support.
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U.S. Cellular's Q3 Earnings Beat Estimate, Revenues Decline Y/Y
U.S. Cellular Corporation (USM - Free Report) reported mixed third-quarter 2024 results, with the bottom line surpassing the Zacks Consensus Estimate but the top line missing the same. The company reported a revenue decline year over year, owing to a decrease in postpaid and prepaid retail connections.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
However, increasing customer growth in fixed wireless businesses partially supported the top line. Growth in postpaid average revenues per user and lower postpaid churn rate are tailwinds.
USM’s Net Income
The company reported a net loss of $79 million or a loss of 92 cents per share. Net income, excluding license impairment charges, was $23 million or 26 cents, matching the prior-year quarter’s tally. The bottom line beat the Zacks Consensus Estimate by 8 cents.
United States Cellular Corporation Price, Consensus and EPS Surprise
United States Cellular Corporation price-consensus-eps-surprise-chart | United States Cellular Corporation Quote
U.S. Cellular's Revenues
The company generated $922 million in operating revenues compared with $963 million in the prior-year quarter. Net sales were negatively affected by a decline in postpaid and prepaid retail connections. The top line missed the Zacks Consensus Estimate of $941 million.
Service revenues decreased to $747 million from $762 million in the prior-year quarter, beating the Zacks Consensus Estimate of $742.31 million. Equipment sales registered $175 million in revenues compared with $201 million in the prior-year quarter.
Fixed wireless customers grew 32% year over year to 140,000. Tower business witnessed healthy momentum during the quarter and registered revenues of $59 million, up 2% year over year. Management’s effort to diversify its third-party customer base is a positive factor.
Handset connections were 84,000, matching the prior-year quarter’s figure. Handset churn rate was 1.07% compared to 1.11% a year ago. Connected devices were 39,000, down from 44,000 a year ago, while the churn rate was 2.47%, down from 2.64% in the year-ago quarter. Total postpaid connections declined to 3,999,000 from 4,159,000 in the year-earlier quarter. Total prepaid connections stood at 452,000, down from 462,000 in the year-ago quarter.
Postpaid average revenues per account improved to $131.81 from $130.91 in the year-ago quarter, with postpaid churn rates of 1.25% and 1.30%, respectively. Postpaid ARPU rose to $52.04 from $51.11 a year ago. Prepaid ARPU was $32.01, down from $33.44 in the prior-year quarter. The prepaid churn rate decreased to 3.30% from 3.68% recorded in the year-ago quarter.
Quarterly Details of USM
Adjusted EBITDA in the quarter stood at $269 million, up from $263 million in the prior-year quarter. Adjusted OIBDA was $222 million, up from $220 million in the year-earlier quarter.
Total operating expenses declined to $1.01 billion, up 12% year over year. The company reported an operating loss of $90 million against an income of $57 million.
U.S. Cellular's Cash Flow & Liquidity
In the September quarter, U.S. Cellular generated $245 million of cash from operating activities compared with $329 million in the year-ago quarter.
As of Sept. 30, 2024, the company had $272 million in cash and cash equivalents and $2.88 billion in long-term debt.
USM’s Outlook
For 2024, U.S. Cellular estimates service revenues in the range of $2,950-$3,000 million. Adjusted OIBDA is estimated within the range of $800-$875 million. The company expects adjusted EBITDA guidance at about $970-$1,045 million and capital expenditure is projected in the band of $550-$600 million.
Zacks Rank & Other Stocks to Consider
U.S. Cellular currently sports a Zacks Rank #3 (Hold).
Arista Networks, Inc. (ANET - Free Report) carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the last reported quarter, ANET delivered an earnings surprise of 8.25%. It provides 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.
Ubiquiti Inc. (UI - Free Report) currently sports a Zacks Rank of 1. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
UI’s excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank #2 at present. In the last reported quarter, the company delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support.