U.S. Cellular's Q4 Earnings Beat Estimate, Revenues Decline Y/Y

Core Insights - U.S. Cellular Corporation (USM) reported strong fourth-quarter 2024 results, with both revenue and net income exceeding Zacks Consensus Estimates despite a year-over-year revenue decline due to reduced retail connections [1][4]. Financial Performance - The company generated $970 million in operating revenues, down from $1 billion in the prior-year quarter, but surpassed the Zacks Consensus Estimate of $945 million [4]. - Net income for the quarter was $5 million (5 cents per share), compared to $14 million (16 cents per share) in the same quarter last year, beating the Zacks Consensus Estimate by 15 cents [3]. - For the full year 2024, total revenues were reported at $3.77 billion, a decrease from $3.906 billion in 2023 [4]. Revenue Breakdown - Service revenues decreased to $742 million from $755 million year-over-year, exceeding the Zacks Consensus Estimate of $726.4 million [5]. - Equipment sales generated $228 million, down from $245 million in the prior-year quarter [5]. Customer Metrics - Fixed wireless customers increased by 27% year-over-year to 145,000, contributing positively to revenue [6]. - Total postpaid connections fell to 3,985,000 from 4,106,000 year-over-year, while total prepaid connections decreased slightly to 448,000 from 451,000 [7]. Churn and ARPU - The postpaid churn rate improved to 1.29% from 1.44% a year ago, while prepaid churn decreased to 3.70% from 3.87% [8]. - Postpaid average revenue per user (ARPU) rose to $51.73 from $51.61, while prepaid ARPU fell to $30.59 from $32.32 [8]. Operational Metrics - Adjusted EBITDA for the quarter was $208 million, down from $233 million in the prior-year quarter [9]. - Total operating expenses remained stable at $979 million, resulting in an operating loss of $9 million compared to an operating income of $21 million in the previous year [9]. Cash Flow and Liquidity - Cash generated from operating activities in the December quarter was $121 million, down from $148 million year-over-year, while total cash from operations for 2024 was $883 million compared to $866 million in 2023 [10]. - As of December 31, 2024, the company had $144 million in cash and cash equivalents and $2.83 billion in long-term debt, compared to $150 million and $3.04 billion, respectively, at the end of the prior year [11].