Full-service wireless carrier United States Cellular Corp. (USM) reported Wednesday an increase in its first-quarter profit, reflecting a growth in data revenues and increased service revenues.
For the first quarter, net income attributable to U.S. Cellular climbed to $84.6 million or $0.97 per share from $70.6 million or $0.80 per share in the previous year.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.53 per share in the first quarter. Analysts' estimates typically exclude special items.
Total operating revenues for the quarter rose 1% to $1.05 billion from $1.04 billion. Eight analysts expected the company to report revenue of $1.05 billion in the first quarter.
Service revenues grew 2% to $981.9 million from $962.1 million, where as revenue from equipment sales dipped 6% to $70.9 million from $75.8 million in the same period last year. Data revenues rose 36% year-over-year to $157.0 million, which represented 16% of service revenues.
John Rooney, U.S. Cellular's chief executive, said that postpay customers, who make up 95% of the company's retail base, are buying more smart phones and touchscreen phones, and using more of the data services thus adding to the topline.
Rooney added, "We had strong gains in data revenues and increased service revenues despite a loss in roaming revenues resulting from the acquisition of Alltel Corporation by Verizon Wireless. Also, U.S. Cellular has had 14 consecutive quarters of year-over-year ARPU growth. And, we kept churn low--a sign that our customer satisfaction strategy continues to be effective."
Looking forward, for fiscal 2009, the company backed its previous service revenue guidance range of $3.9 billion to $4.0 billion. The company forecast operating income of $275 million - $350 million for the full year. Capital expenditure is expected to be about $575 million for the period.
USM is currently trading at $38.76, up $3.73 or 10.65%, on the NYSE.
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