U.S. Cellular 2016 Q1 Results Below Expectations

The last couple of weeks has seen a number of companies releasing their financial particulars as the market looks to bring to a close the first quarter of 2016. Overall, it has been an interesting quarter with some clear winners like Facebook, as well as some interesting results (like the increase in users but less than expected increase in revenue from Twitter). As to be expected, the carriers have also been releasing their data with T-Mobile and AT&T seeming to have done pretty well during the first three months of this year. Next to offer an insight into how they are doing is U.S Cellular and once again, the results are proving to be interesting with U.S. Cellular seeing Q1 as a positive quarter, while analysts disagree. So much so that U.S. Cellular shares have dropped significantly since the announcement of the results.

A lot of the disagreement on U.S. Cellular's results stem from the company not achieving the results that had been expected. For instance, revenue for the first quarter came in at $958 million. An amount which is significantly below the $972 million which had been expected by some analysts, as well as being down from last year when the same period saw revenue generated in the region of $965 million. In addition net income ($9 million) was down from last year’s same quarter figure of $160 million. While that sounds like a colossal drop, last year’s figure did include a one-off gain of $145 million. However, excluding the outlier gain still reflects an overall loss in net income. In terms of subscribers, U.S. Cellular’s postpaid ARPU was also down from last year’s $54.87 to this year's figure of $48.13. While the prepaid ARPU was also down, $35.51 compared to $35.72. In terms of actual numbers, U.S. Cellular noted postpaid net adds in the regions of 45,000 and prepaid net adds in the region of 12,000.

In spite of what analysts are viewing as a negative quarter for the carrier, U.S. Cellular notes that they "are off to a good start in 2016 with solid first quarter results." One area in which they actually bucked the trend is in handset upgrades, where the company did see an increase, albeit a slight one. An increase which U.S. Cellular’s President & CEO, Kenneth Meyers, credits in part to the success of the Samsung Galaxy S7 and of course, its availability through U.S. Cellular.

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John Anon

Editor-in-Chief
John has been writing about and reviewing tech products since 2014 after making the transition from writing about and reviewing airlines. With a background in Psychology, John has a particular interest in the science and future of the industry. Besides adopting the Managing Editor role at AH John also covers much of the news surrounding audio and visual tech, including cord-cutting, the state of Pay-TV, and Android TV. Contact him at [email protected]