U.S. Cellular Q3 Report Shows Stability, Improved Outlook

U.S. Cellular has released its Q3 2017 report and, perhaps strangely, there has been no change in operating revenue from Q2 2017. The company reported total operating revenue at $963 million in both the second and third quarters, which is down year-over-year by around $60 million for Q3. The company's churn rates, in the meantime, are respectable but not spectacular. For postpaid subscribers, the company reports an overall churn rate of 1.16-percent. That's down by 0.18-percent year-over-year but up from Q2 2017, which saw a postpaid churn rate of 1.13-percent for the service provider. For the prepaid side of the business, churn fell in at 4.75-percent - down both year-over-year and quarterly from 4.84-percent and 4.93-percent, respectively. The company's postpaid subscriber numbers jumped up by 35,000 users from the second quarter and by 29,000 year-over-year. Prepaid signup is also up by around 31,000 from Q2 2017, following a relatively flat year on that front.

Meanwhile, the company's estimated results for 2017 also changed. Expected operating income before depreciation (OIBDA) has been adjusted down from between $3.8 and $4 billion. The new OIBDA for the entire fiscal year is predicted to fall between $3.85 and $3.95 billion. Expectations for adjusted OIBDA and the company's net earnings - represented as EBITDA - are both up. If its estimates turn out to be accurate, the mobile provider will see no further increases in expenditures but will see improvements in revenue through the end of the year. By the numbers, the mobile service provider has increased adjusted OIBDA expectations from between $550 and $650 million up to somewhere between $600 and $700 million. Adjusted EBITDA estimates are up by around $40 million from previous expectations. U.S. Cellular does not expect any increases to capital expenditures, which remain at an estimated $500 million for the entire year.

The figures themselves don't appear to show resounding success for U.S. Cellular. The company's assets and equity also fell year-over-year, with each figure falling by around 4.64-percent. On the other hand, free cash flow for the company was up by $25 million for the quarter from last year. It's worth noting that the market has been very competitive this year, with each service provider pushing a number of promotions and lowering price points. That has been at least one key factor CEO and president Kenneth R. Meyers points to as an explanation for decreases in average revenue per user and stagnant operating revenues - with revenue per user falling both from last quarter and from the same quarter last year. So it may not be overtaking the competition anytime soon, but U.S. Cellular certainly appears to be stable, at very least.

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