UScellular Reports Third Quarter 2024 Financial Results

Intellectia.AI2024-11-01

Illustration by Intellectia.AI

UScellular Reports Third Quarter 2024 Financial Results

United States Cellular Corporation (NYSE: USM) reported its financial results for the third quarter of 2024 on November 1, 2024. The results show significant changes in various financial metrics compared to the previous year and quarter.

Financial Metrics

Financial Metric	Q3 2024	Q3 2023	Year-Over-Year Change	Consensus Estimate	Variance from Estimate
Total Operating Revenue	$922 million	$963 million	-4.3%	$939.81 million	-$17.81 million
Service Revenue	$747 million	$762 million	-2%	-	-
Net Income (Loss)	-$79 million	$23 million	Not applicable	-	-
Diluted EPS	-$0.92	$0.26	Not applicable	$0.13	-$1.05

Interpretation: UScellular experienced a decrease in total operating revenue and service revenues year-over-year, missing consensus revenue estimates. The company reported a loss in net income and diluted earnings per share, also falling short of earnings expectations. Key factors include a $136 million impairment charge primarily related to high-band spectrum licenses.

Key Developments

Announced sale of select spectrum assets for $1 billion to Verizon and additional sales to two other mobile operators.
Improved postpaid handset net losses and postpaid ARPU grew by 2% year-over-year.
Prepaid net additions and improvements in both postpaid and prepaid churn metrics.
Fixed wireless customer base grew 32% to 140,000.

Executive Comments

Laurent C. Therivel, UScellular President and CEO, emphasized the company's strategic focus on promotional and retention actions resulting in improved subscriber metrics and ARPU growth. Therivel also expressed confidence in raising the 2024 Adjusted EBITDA guidance and highlighted the significance of recent spectrum sales as part of broader monetization strategies.

Stock Repurchase and Shareholder Returns

During the third quarter, UScellular repurchased 474,074 of its common shares for $26 million. No dividend announcements were made in the release.

Forward Guidance

The company raised its 2024 Adjusted EBITDA guidance. However, specific forward-looking figures or estimates were not disclosed in the release.

Stock Price Movement

Following the earnings release, UScellular's stock price decreased by approximately 0.98%.

This financial summary encapsulates UScellular's challenges and strategic direction during the third quarter of 2024, highlighting the company's operational adjustments and strategic asset sales in a competitive market environment.