U.S. Cellular Q1 2020 Earnings Report
Key Takeaways
U.S. Cellular reported total operating revenues of $963 million for the first quarter of 2020, slightly lower than the $966 million reported for the same period last year. Service revenues increased by 3% year-over-year, totaling $762 million. Net income attributable to U.S. Cellular shareholders was $71 million, or $0.81 per diluted share, compared to $54 million, or $0.62 per diluted share, in the same period one year ago.
U.S. Cellular is focused on managing through unprecedented times by prioritizing customers and associates and maintaining a strong network.
The company has adapted to the changed business environment by modifying store hours, increasing social distancing measures, and enabling remote work for customer care center employees.
U.S. Cellular is focused on maintaining network performance, with engineers working to meet increased demand and continuing its network modernization program.
The company's Q1 financial results were solid, including a tax benefit from the CARES Act, partially offset by an incremental allowance for anticipated higher levels of bad debts.
U.S. Cellular
U.S. Cellular
U.S. Cellular Revenue by Segment
Forward Guidance
U.S. Cellular provided estimates for full-year 2020 results, which are subject to uncertainty due to the COVID-19 pandemic.
Positive Outlook
- Service revenues are expected to be between $3.0 billion and $3.1 billion.
- Capital expenditures are projected to remain unchanged.
- Company is focused on adapting to meet the wireless needs of communities and customers.
- Company is planning for the return to a more stable future environment.
- Company is continuing to execute on its strategic priorities.
Challenges Ahead
- Adjusted OIBDA is estimated to be between $725 million and $850 million.
- Adjusted EBITDA is projected to be between $900 million and $1.025 billion.
- There can be no assurance that final results will not differ materially from estimated results, especially in light of the uncertainty created by the COVID-19 pandemic.
- Company expects there might be more near-term impacts from the pandemic, including lower store traffic and new customer growth.
- The impact of the COVID-19 pandemic on U.S. Cellular's business is uncertain, and depending on its duration and severity, it could have a material adverse effect on U.S. Cellular's business, financial condition, or results of operations.