US Cellular reports net income of $68 million for Q2
While US Cellular CEO Laurent C. Therivel, who took over the post in early July, acknowledged that many aspects of the company’s performance this past quarter were impacted by the pandemic, he also reported “very solid results,” topping expectations with a net income of $68 million for Q2.
When compared to this same quarter last year, which had a reported net income $31 million, it does seem that things went considerably well for the operator. The company also reported a total operating revenue of $973 million this past quarter, which is equal to the same period one year ago. The impressive growth in income, despite a flat revenue trajectory is being attributed predominantly to network modernization efforts and to lower operating expenses.
In addition, service revenues totaled $753 million, which is down only 1% compared to the same period a year ago.
“Churn was exceptionally low, offsetting less store traffic, and we saw an increase in smartphone connections,” Therivel provided. “We continued our network investment programs, deploying 5G to additional markets and maintaining the quality of our network despite increasing demand for data.”
The evidence of Therivel’s words can be seen in the operator’s early July announcement that it plans to extend its 5G buildout, deployed on its 600 MHz spectrum, to 11 additional states.
When asked about his top priorities on the earning’s call, Therivel responded that beyond ensuring the the health and safety of employees and customers, the near-term goals are around driving top line growth, as well as expanding presence in some of the areas where its presence is limited.
“Like prepaid services and B2B services,” he continued, adding that developing “more robust partnerships” on both the product and infrastructure side is also in the cards.
US Cellular’s SVP of Finance and CFO Vicki Villacrez illustrated the ebb and flow of the past two quarters that many in the telecommunications sector experienced as a result of current events, saying, “Early on, we had an initial surge in demand as a reaction to the pandemic. We had a strong growth in connections across wireline and cable — 6% and 9%, respectively. After the initial surge, our growth leveled off, but is at expectation and we expect this to continue through the rest of the year.”
Since the beginning of 2020, US Cellular shares have declined 17%, which hit $29.94, a drop of 20% in the last 12 months, as of yesterday.
US Cellular’s current estimates of full-year 2020 results are shown below.
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