U.S. Cellular Reports Third Quarter 2011 Results Data drives ARPU growth; inbound roaming revenues increase; profitability improves
CHICAGO, Nov. 4, 2011 /PRNewswire/ --
Note: Comparisons are year over year unless otherwise noted.
3Q 2011 Highlights
- Smartphones sold, as a percent of total devices sold, increased to 39.9 percent from 23.6 percent; smartphone customers increased to 26.2 percent of postpaid customers from 12.1 percent.
- Postpaid ARPU (average revenue per unit) increased to $52.41 from $50.82.
- Service revenues increased 5 percent to $1,036.6 million.
- Operating income increased 66 percent to $101.6 million.
- Net loss of 23,000 retail customers, reflecting loss of 34,000 postpaid customers and gain of 11,000 prepaid customers; postpaid customers comprised 95 percent of retail customers.
- Cell sites in service increased 4 percent to 7,828.
As previously announced, U.S. Cellular will hold a teleconference Nov. 4, 2011 at 9:00 a.m. CDT. Interested parties may listen to the call live by accessing the Investor Relations page of uscellular.com or www.teldta.com.
United States Cellular Corporation (NYSE: USM) reported service revenues of $1,036.6 million for the third quarter of 2011 versus $983.5 million in the comparable period one year ago. Net income attributable to U.S. Cellular shareholders and related diluted earnings per share were $62.1 million and $0.73, respectively, for the third quarter of 2011, compared to $38.3 million and $0.44, respectively, in the comparable period one year ago.
"We continued to increase postpaid ARPU and maintain a low churn rate," said Mary N. Dillon, U.S. Cellular president and CEO, "and though our retail subscriber results remain disappointing, they did improve slightly compared to recent quarters. We are seeing increased awareness from our advertising, device launches and focused promotions, and we're building on that with targeted campaigns to add more new customers during the holiday period and beyond.
"Smartphones sales and adoption of data plans remain very strong, and we're continuing to control loss on equipment by balancing device costs and promotions. We again improved operating margins by increasing ARPU and roaming revenue, and controlling expenses. Also during the quarter, we completed an exchange of licenses that will provide additional spectrum to meet anticipated future capacity and coverage requirements in several of our markets.
"Along with our Belief Plans, which 2.8 million of our customers have now selected, we're offering a competitive device lineup for the holiday period, including the highly rated Motorola Electrify™, and several new smartphones at attractive price points from HTC. We'll complete our first 4G LTE markets in November, and offer 4G-enabled devices early in 2012."
Guidance for year ending Dec. 31, 2011
Guidance for the year ending Dec. 31, 2011, as of Nov. 4, 2011, is provided below, compared to the previous guidance provided on Aug. 8, 2011. U.S. Cellular undertakes no duty to update such information, whether as a result of new information, future events, or otherwise. There can be no assurance that final results will not differ materially from this guidance.
Previous Estimates (1)
Operating income (3) (4)
Depreciation, amortization and accretion expenses,
and losses on asset disposals and exchanges
and impairment of assets (3)
Approx. $590 million
Adjusted OIBDA (2) (4)
Capital expenditures (4)
(1) The 2011 Estimated Results as disclosed in U.S. Cellular's Quarterly Report on Form 10-Q for the period ended June 30, 2011.
(2) Adjusted OIBDA is defined as Operating income excluding the effects of: Depreciation, amortization and accretion (OIBDA); the net gain or loss on asset disposals and exchanges (if any); and the loss on impairment of assets (if any). This measure also may be commonly referred to by management as operating cash flow. This measure should not be confused with cash flows from operating activities, which is a component of the consolidated statement of cash flows.
(3) The 2011 Estimated Results do not include any estimate for losses on impairment of assets since these cannot be predicted.
(4) This guidance is based on U.S. Cellular's current operations, which include a multi-year deployment of Long-term Evolution ("LTE") technology commencing in 2011. As customer demand for data services increases, and competitive conditions in the wireless industry evolve, such as the rate of deployment of LTE technology by other carriers, the timing of U.S. Cellular's deployment of LTE and the timing of other capital expenditures could change. These factors could affect U.S. Cellular's estimated capital expenditures and operating expenses in 2011.
Conference call information
U.S. Cellular will hold a conference call on Nov. 4, 2011 at 9:00 a.m. CDT.
- Access the live call on the Investor Relations page of uscellular.com or at http://www.videonewswire.com/event.asp?id=82599.
- Access the call by phone at 877/407-8029 (US/Canada), no pass code required.
Before the call, certain financial and statistical information to be discussed during the call will be posted to the Investor Relations page of uscellular.com. The call will be archived on the Conference Calls page of uscellular.com.
About U.S. Cellular
United States Cellular Corporation, the nation's sixth-largest wireless carrier, provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to approximately 5.9 million customers in 26 states. The Chicago-based company employed approximately 8,900 people as of September 30, 2011. At the end of the third quarter, Telephone and Data Systems, Inc. owned 84 percent of U.S. Cellular.
Visit uscellular.com for comprehensive financial information, including earnings releases, quarterly and annual filings, shareholder information and more.