United States Cellular (USM) Tops On Q4 Earnings & Revenues

United States Cellular (NYSE:USM) , a subsidiary of Telephone & Data Systems (NYSE:TDS) , posted impressive financial results for the fourth quarter of 2017. Both the bottom line and the top line surpassed the Zacks Consensus Estimate.

United States Cellular has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GAAP net income came in at $273 million or $3.18 per share against net loss of $6 million or a loss of 7 cents in the year-ago quarter. Moreover, the company reported adjusted earnings of 5 cents, which bettered the Zacks Consensus Estimate of a loss of 8 cents.

Quarterly total revenues of $1,029 million increased 3.8% year over year. Also, it surpassed the Zacks Consensus Estimate of $1,000.8 million. Quarterly Service revenues of $755 million were almost same with the year-ago quarter. Revenues from Equipment sales increased 8% to $274 million.

Quarterly operating expenses increased 1% to $1,033 million. Operating loss was $4 million compared with operating loss of $14 million in the year-ago quarter.

Total cell sites in service were 6,460 compared with 6,415 at the end of 2016. Total company-owned towers were 4,080 compared with 4,040 at the end of 2016.

Cash Flow & Liquidity

For the fourth quarter of 2017, cash from operations came in at $76 million compared with $86 million in the prior year quarter. In 2017, free cash flow was $4 million compared with $58 million at the end of 2016.

United States Cellular exited the quarter with cash and cash equivalents and short-term investments of $402 million compared with $586 million at the end of 2016. Total debt was $1,640 million compared with $1,629 million at the end of 2016.

ARPU & Churn

Quarterly postpaid ARPU (average revenue per user) decreased to $44.12 from $45.19 at the end of 2016. Postpaid ARPA (average revenue per account) was $118.05 compared with $120.67 at the end of 2016. Postpaid churn declined to 1.27% from 1.41% registered at the end of 2016. Prepaid ARPU decreased to $32.42 from $33.25 registered at the end of 2016. Prepaid churn decreased to 5.09% in the reported quarter from 5.44% at 2016-end.

Subscriber Statistics

United States Cellular exited the fourth quarter of 2017 with a subscriber base of 5,096,000 compared with 5,031,000 at the end of 2016. Postpaid subscriber base totaled 4,518,000 compared with 4,482,000 at the end of 2016. Prepaid subscriber base totaled 519,000, compared with 484,000 at the end of 2016. In the reported quarter, United States Cellular gained a net of 5,000 postpaid subscribers against a net loss of 2,000 customers in the year-ago quarter. The company’s net gain of 4,000 prepaid customers was flat year over year.

Guidance for 2018

United States Cellular expects total operating revenues in the band of $3,850-$4,050 million. Adjusted EBITDA is projected in the range of $765-$915 million while capital expenditure is estimated between $500 and $550 million. The company projects adjusted OIBDA in the range of $625-$775 million.

Upcoming Releases

Investors interested in the broader Computer and Technology sector are keenly awaiting earnings reports from key players like SBA Communications (NASDAQ:SBAC) and Broadcom Ltd. (NASDAQ:AVGO) . While SBAC Communications is scheduled to release fourth-quarter 2017 results on Feb 26, Broadcom will report its first-quarter fiscal 2018 results on Mar 7.

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