Service and data revenues increase 2 and 36 percent in the quarter
Note: Comparisons are year over year unless otherwise noted.
1Q 2009 Highlights
- 2 percent increase in service revenues, to $981.9 million.
- 36 percent increase in data revenues, to $157.0 million, representing 16 percent of service revenues.
- 1 percent increase in ARPU (average monthly service revenue per unit), to $52.54.
- Postpay churn remained low at 1.5 percent; postpay customers comprised 95 percent of retail customers.
- 8 percent increase in cell sites in service, to 6,942, of which approximately 4,000 are company-owned.
-Repurchased 367,000 common shares for $13.3 million to offset dilution from employee benefit plans.
CHICAGO, May 6 /PRNewswire-FirstCall/ -- United States Cellular Corporation (NYSE: USM) reported service revenues of $981.9 million for the first quarter of 2009, a 2 percent increase from $962.1 million in the comparable period one year ago. The company recorded operating income of $114.8 million, down from $119.0 million in the first quarter of 2008. Net income attributable to U.S. Cellular and related Diluted earnings per share were $84.6 million and $0.97, respectively, for the first quarter of 2009, compared to $70.6 million and $0.80, respectively, in the comparable period one year ago.
'We had solid gains in postpay customers, who are the cornerstone of our strategy,' said John E. Rooney, U.S. Cellular president and CEO. 'These postpay customers make up 95 percent of U.S. Cellular's retail base, and they are buying more of our smart phones and touchscreen phones, and using more of our data services.
'As a result,' added Rooney, 'we had strong gains in data revenues and increased service revenues despite a loss in roaming revenues resulting from the acquisition of Alltel Corporation by Verizon Wireless. Also, U.S. Cellular has had 14 consecutive quarters of year-over-year ARPU growth. And, we kept churn low--a sign that our customer satisfaction strategy continues to be effective.
'To keep our product mix optimized, we rolled out new handsets in the quarter, and brought the HTC Touch Pro(TM) to our lineup in April,' continued Rooney. 'Sales of all smartphones and premium devices, including our BlackBerry(R) and Windows Mobile(R) solutions, have nearly tripled year over year. As we expand our 3G network to more of our cell sites, we expect continued revenue growth in this area.
'We are committed to growing U.S. Cellular for the long term,' said Rooney, 'and we have the sound strategy and dedicated associates to provide quality services and products and unmatched customer support. We recently received a seventh-consecutive award for call quality from J.D. Power and Associates. We're proud of our network, and we're proud to be a company our customers can believe in.'
Guidance
Guidance for the year ending Dec. 31, 2009 is as follows. Guidance is unchanged from Feb. 26, 2009. There can be no assurance that final results will not differ materially from this guidance.
U.S. Cellular 2009 guidance as of May 6, 2009 is as follows:
Net Retail Customer Additions 75,000 - 150,000
Service Revenues $3,900 - $4,000 million
Operating Income(1) $275 - $350 million
Depreciation, Amortization & Accretion(1) Approx. $600 million
Capital Expenditures Approx. $575 million
(1) Includes losses on disposals of assets.
The foregoing guidance represents the views of management as of May 6, 2009 and should not be assumed to be accurate as of any other date. U.S. Cellular undertakes no legal duty to update such information, whether as a result of new information, future events, or otherwise.
Conference call information
U.S. Cellular will hold a conference call on May 6, 2009 at 10:00 a.m. Chicago time.
Before the call, certain financial and statistical information to be discussed during the call will be posted to the Conference Calls page of www.uscellular.com, together with reconciliations to generally accepted accounting principles (GAAP) of any non-GAAP information to be disclosed. The call will be archived on the Conference Calls page of www.uscellular.com.
About U.S. Cellular(R)
United States Cellular Corporation, the nation's fifth-largest, full-service wireless carrier, provides a comprehensive range of wireless products and services, excellent customer support, and a high-quality network to nearly 6.2 million customers in 26 states. The Chicago-based company employed approximately 8,800 full-time equivalent associates as of March 31, 2009. For more information about U.S. Cellular, visit www.uscellular.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates, and expectations. These statements are based on current estimates, projections, and assumptions, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.
