United States Cellular Q3 Loss Widens, But Results Beat View

(RTTNews) - Wireless telecommunications service provider United States Cellular Corp. (USM) on Friday reported a loss for the third quarter that widened from last year despite higher revenues.

However, loss per share for the quarter was narrower than analysts' expectations, while revenues beat their estimates. Looking ahead, the company affirmed its revenue outlook for fiscal 2014.

Kenneth Meyers, President and CEO of U.S. Cellular said, "Our top strategic priority this year is to grow our customer base. We have made significant progress toward that objective with net postpaid customer additions of 52,000 in the quarter."

The Chicago, Illinois-based company's third-quarter net loss to shareholders widened to $22.17 million or $0.26 per share from loss of $9.86 million or $0.12 per share, last year.

On average, five analysts polled by Thomson Reuters expected the company to report loss of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.

Total operating revenues for the quarter grew 7 percent to $1.00 billion from $939.24 million in the year-ago period. Analysts had a consensus revenue estimate of $979.83 million for the quarter.

The company noted that growth in both data use and the adoption of Equipment Installment Plans drove the increase in total revenues, though margins remained under pressure from higher smartphone subsidies.

Net postpaid additions in the quarter were 52,000, compared to net losses of 60,000 in the year-ago period.

Total operating expenses in the quarter increased 7 percent from the prior-year period to $1.05 billion.

The company recorded a loss on asset disposals of $7.95 million in the quarter, compared to loss of $1.70 million in the year-ago period. Gain on sale of business and other exit costs was $10.28 million, compared to gain of $1.53 million last year.

Looking ahead to fiscal 2014, United States Cellular affirmed its outlook for total operating revenues in a range of $3.90 billion to $4.00 billion. Analysts expect the company to report 2014 revenue of $3.87 billion.

The company now forecasts adjusted income before income taxes in a range of $375 million to $450 million, compared to the prior guidance range of $350 million to $450 million.

Meyers added, "As we move into the holiday sales season, I'm confident that we will continue to attract wireless consumers with our strong value proposition that offers a high-quality network experience, competitive devices, plans, and pricing, and excellent customer service with a local focus."

USM is trading at $35.34, down $0.62 or 1.72 percent on a volume of 1,311 shares.