We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
U.S. Cellular's (USM) Q2 Earnings Beat Despite Lower Revenues
Read MoreHide Full Article
U.S. Cellular Corporation (USM - Free Report) reported relatively healthy second-quarter 2024 results, with both the bottom line and top line surpassing the respective Zacks Consensus Estimate. However, the company reported a revenue decline year over year, owing to a decrease in postpaid and prepaid retail connections. However, increasing customer growth in fixed wireless businesses partially supported the top line. Cost discipline initiatives enhanced operating margin. Growth in postpaid average revenues per user and lower postpaid churn rate are tailwinds.
Net Income
Net income in the quarter was $17 million or 20 cents per share compared with $5 million or 5 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 10 cents. The improvement was primarily attributed to lower operating expenses year over year.
United States Cellular Corporation Price, Consensus and EPS Surprise
The company generated $927 million in operating revenues compared with $957 million in the prior-year quarter. Net sales were negatively affected by a decline in postpaid and prepaid retail connections. The top line beat the Zacks Consensus Estimate by $2 million.
Service revenues decreased to $743 million from $760 million in the prior-year quarter. The figure marginally missed the Zacks Consensus Estimate of $743.47 million. Equipment sales registered $184 million in revenues compared with $197 million in the prior-year quarter.
Fixed wireless customers grew 40% year over year to 134,000. Tower business witnessed healthy momentum during the quarter and registered revenues of $58 million, up 3% year over year. Management’s effort to diversify its third-party customer base is a positive factor.
Handset connections were 73,000 compared to 83,000 in the year-ago quarter. Handset churn rate was 0.97% compared to 1.01% a year ago. Connected devices were 44,000, up from 42,000 a year ago, while the churn rate was 2.47%, down from 2.65% in the year-ago quarter. Total postpaid connections declined to 4,027,000 from 4,194,000 in the year-earlier quarter. Total prepaid connections stood at 439,000, down from 462,000 in the year-ago quarter.
Postpaid average revenues per account improved to $130.41 from $130.19 in the year-ago quarter, with postpaid churn rates of 1.16% and 1.21%, respectively. Postpaid ARPU rose to $51.45 from $50.64 a year ago. Prepaid ARPU was $32.37, down from $33.86 in the prior-year quarter. The prepaid churn rate decreased to 3.60% from 4.18% recorded in the year-ago quarter.
Quarterly Details
Adjusted EBITDA in the quarter stood at $268 million, up from $239 million in the prior-year quarter. The 13% year-over-year growth was induced by various cost optimization initiatives. Adjusted OIBDA rose to $227 million from $198 million in the year-earlier quarter.
Total operating expenses declined to $891 million, down 3% year over year. Consequently, operating income rose to $36 million from $34 million in the year-ago quarter.
Cash Flow & Liquidity
In the June quarter, U.S. Cellular generated $313 million of cash from operating activities compared with $349 million in the year-ago quarter.
As of Jun 30, 2024, the company had $195 million in cash and cash equivalents and $2.88 billion in long-term debt.
Outlook
For 2024, U.S. Cellular estimates service revenues in the range of $2,950-$3,050 million. Adjusted OIBDA is estimated within the range of $750-$850 million. The company expects adjusted EBITDA guidance at about $920-$1,020 million and capital expenditure is projected in the band of $550-$650 million.
Zacks Rank & Stocks to Consider
U.S. Cellular currently sports a Zacks Rank #3 (Hold).
It 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.
Motorola Solutions Inc. (MSI - Free Report) provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure services. Motorola carries a Zacks Rank #2 (Buy) at present.
It delivered a trailing four-quarter average earnings surprise of 8.06% and has a long-term growth expectation of 9.47%. In the last reported quarter, Motorola delivered an earnings surprise of 7.64%.
CommScope Holding Company, Inc. (COMM - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 65.22% in the last reported quarter.
It is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. The company has created a niche market for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
U.S. Cellular's (USM) Q2 Earnings Beat Despite Lower Revenues
U.S. Cellular Corporation (USM - Free Report) reported relatively healthy second-quarter 2024 results, with both the bottom line and top line surpassing the respective Zacks Consensus Estimate. However, the company reported a revenue decline year over year, owing to a decrease in postpaid and prepaid retail connections. However, increasing customer growth in fixed wireless businesses partially supported the top line. Cost discipline initiatives enhanced operating margin. Growth in postpaid average revenues per user and lower postpaid churn rate are tailwinds.
Net Income
Net income in the quarter was $17 million or 20 cents per share compared with $5 million or 5 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 10 cents. The improvement was primarily attributed to lower operating expenses year over 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
The company generated $927 million in operating revenues compared with $957 million in the prior-year quarter. Net sales were negatively affected by a decline in postpaid and prepaid retail connections. The top line beat the Zacks Consensus Estimate by $2 million.
Service revenues decreased to $743 million from $760 million in the prior-year quarter. The figure marginally missed the Zacks Consensus Estimate of $743.47 million. Equipment sales registered $184 million in revenues compared with $197 million in the prior-year quarter.
Fixed wireless customers grew 40% year over year to 134,000. Tower business witnessed healthy momentum during the quarter and registered revenues of $58 million, up 3% year over year. Management’s effort to diversify its third-party customer base is a positive factor.
Handset connections were 73,000 compared to 83,000 in the year-ago quarter. Handset churn rate was 0.97% compared to 1.01% a year ago. Connected devices were 44,000, up from 42,000 a year ago, while the churn rate was 2.47%, down from 2.65% in the year-ago quarter. Total postpaid connections declined to 4,027,000 from 4,194,000 in the year-earlier quarter. Total prepaid connections stood at 439,000, down from 462,000 in the year-ago quarter.
Postpaid average revenues per account improved to $130.41 from $130.19 in the year-ago quarter, with postpaid churn rates of 1.16% and 1.21%, respectively. Postpaid ARPU rose to $51.45 from $50.64 a year ago. Prepaid ARPU was $32.37, down from $33.86 in the prior-year quarter. The prepaid churn rate decreased to 3.60% from 4.18% recorded in the year-ago quarter.
Quarterly Details
Adjusted EBITDA in the quarter stood at $268 million, up from $239 million in the prior-year quarter. The 13% year-over-year growth was induced by various cost optimization initiatives. Adjusted OIBDA rose to $227 million from $198 million in the year-earlier quarter.
Total operating expenses declined to $891 million, down 3% year over year. Consequently, operating income rose to $36 million from $34 million in the year-ago quarter.
Cash Flow & Liquidity
In the June quarter, U.S. Cellular generated $313 million of cash from operating activities compared with $349 million in the year-ago quarter.
As of Jun 30, 2024, the company had $195 million in cash and cash equivalents and $2.88 billion in long-term debt.
Outlook
For 2024, U.S. Cellular estimates service revenues in the range of $2,950-$3,050 million. Adjusted OIBDA is estimated within the range of $750-$850 million. The company expects adjusted EBITDA guidance at about $920-$1,020 million and capital expenditure is projected in the band of $550-$650 million.
Zacks Rank & Stocks to Consider
U.S. Cellular currently sports a Zacks Rank #3 (Hold).
Arista Networks, Inc. (ANET - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. In the last reported quarter, it delivered an earnings surprise of 8.25%. You can see the complete list of today’s Zacks #1 Rank stocks here.
It 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.
Motorola Solutions Inc. (MSI - Free Report) provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure services. Motorola carries a Zacks Rank #2 (Buy) at present.
It delivered a trailing four-quarter average earnings surprise of 8.06% and has a long-term growth expectation of 9.47%. In the last reported quarter, Motorola delivered an earnings surprise of 7.64%.
CommScope Holding Company, Inc. (COMM - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 65.22% in the last reported quarter.
It is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. The company has created a niche market for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration.