U.S. Cellular released its first quarterly report for 2018 on May 1, showing that the mobile carrier is off to a decent start for the year alongside a few minor setbacks. The company highlights, among other things, a reduction in expenses which resulted in an operating income of around $218 million. That's a 13-percent growth from last year. Moreover, according to the report, the company experienced better than expected performance on both postpaid and prepaid adds, as well. However, it isn't necessarily all good news despite performance improvements for the company. Several of the reported figures are in the negative and some of that growth may be attributable to increases in the average revenue generated per account. The latter of those was up 2-percent year-over-year for the company and 0.38-percent from the previous quarter.
On the other hand, total operating revenues without adjustment for expenditures rose from $936 million to $942 million year-over-year but fell compared to the quarters in between. The carrier's churn rate fell by around 0.05-percent quarterly for connected devices and 0.03-percent for handsets. Those figures fell in at 2.79-percent and 0.97-percent, respectively. While that's below the 1.08-percent for handsets seen in Q1 2017, the churn rate is up by 0.24-percent for connected devices for that period. In the meantime, both net and gross additions are also down both quarterly, and year-over-year. For connected devices and handsets, gross additions are down 31-percent from last quarter and just over 11.5-percent annually. Net adds saw a loss of 16,000 handsets and 21,000 connected devices. That's compared to 18,000 net additions last quarter for handsets and a loss of 13,000 connected devices. Although that is an improvement from last year's 28,000 loss on the handset front, it is hardly stellar.
Despite those setbacks, however, U.S. Cellular remains optimistic but has not adjusted its outlook for the full year. In fact, the company expects to be relatively close to its same numbers from 2017. The previous year saw operating revenues hit $3.89 billion, while expectations for 2018 are between $3.85 and $4.05 billion. Operating incomes before and after relative adjustments follow that trend. Bearing that in mind, the company is set to increase its capital expenditures for the year by around 6.6-percent to 17.3-percent – landing at between $500 million and $550 million compared to 2017's $469 million. Although there's no way of knowing whether other developments currently playing out with its rivals could affect those figures, that is a substantial increase. So it should be interesting to see how it affects the company's results moving forward.