Yahoo Finance United States Cellular Corp (USM) Q1 2024 Earnings: Aligns with EPS Projections Amid Revenue Decline
Revenue: Reported $950 million in total operating revenues for Q1 2024, a decrease of 4% year-over-year, falling just short of estimates of $957.81 million.
Net Income: Achieved $18 million, a 36% increase from the previous year, below the estimated $23.94 million.
Earnings Per Share (EPS): Delivered $0.20 per share, below the estimated $0.27.
Service Revenues: Declined by 2% year-over-year to $754 million.
Operating Income: Rose significantly by 94% to $51 million from $26 million in the same quarter last year.
Net Additions: Experienced a net loss of 44,000 postpaid connections during the quarter.
Fixed Wireless Growth: Saw a substantial increase of 42% in fixed wireless customers, reaching 124,000.
On May 3, 2024, United States Cellular Corp (NYSE:USM) disclosed its financial results for the first quarter of 2024, revealing a mix of achievements and ongoing challenges. The company reported total operating revenues of $950 million, a decrease from $986 million in the same period last year. Despite this, net income saw an improvement, coming in at $18 million with earnings per share (EPS) of $0.20, aligning closely with analyst expectations of $0.27 EPS and a net income of $23.94 million. For more details, view the full 8-K filing.
About United States Cellular Corp
United States Cellular Corporation, a key player in the telecommunications sector, provides a wide range of wireless products and services. With approximately 4.5 million customers across 21 states, USM operates in a highly competitive market. The company is known for its strong customer support and high-quality network, primarily serving rural and second-tier cities in regions such as the Midwest, mid-Atlantic, New England, and the Pacific Northwest.
Financial Performance and Strategic Initiatives
USM's first-quarter performance highlighted a 2% decrease in service revenues, which totaled $754 million. However, the company experienced significant growth in net income and adjusted EBITDA, which increased notably compared to the previous year. This financial growth was supported by a 3% increase in postpaid ARPU and a reduction in the postpaid churn rate by 4%. Additionally, the number of fixed wireless customers surged by 42% to 124,000.
President and CEO Laurent C. Therivel commented on the challenges and strategic measures, stating,
We delivered strong bottom-line results during the quarter, driven by postpaid ARPU growth and our ongoing focus on expense discipline. Although postpaid handset gross additions continue to be a challenge, we have made recent promotional changes to drive improvement."
Exploration of Strategic Alternatives
In a significant development, USM, alongside Telephone and Data Systems, Inc. (TDS), announced the exploration of strategic alternatives to enhance shareholder value. This review is ongoing, reflecting the company's proactive approach in navigating a rapidly evolving market landscape.
Financial Health and Outlook
The company reaffirmed its full-year 2024 guidance, expecting unchanged service revenues of $2,950-$3,050 million and an adjusted OIBDA of $750-$850 million. Capital expenditures are projected to remain between $550 million and $650 million. This guidance reflects USM's steady focus on maintaining financial discipline while seeking growth opportunities.
Conclusion
While USM faces challenges such as a decline in service revenues and the competitive pressures of the telecommunications industry, its strategic initiatives and focus on operational efficiency provide a balanced outlook for 2024. The ongoing review of strategic alternatives could further influence the company's trajectory, making USM a noteworthy entity for investors closely monitoring the telecom sector.
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Explore the complete 8-K earnings release (here) from United States Cellular Corp for further details.
This article first appeared on GuruFocus.
