U.S. Cellular Corporation USM reported healthy fourth-quarter 2024 results, with both top and bottom lines surpassing the respective Zacks Consensus Estimates. The company reported a revenue decline year over year, owing to a decrease in postpaid and prepaid retail connections.

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However, increasing customer growth in fixed wireless businesses partially supported the top line. Growth in postpaid average revenues per user and lower postpaid churn rate are tailwinds.

USM’s Net Income

The company reported a net income of $5 million or 5 cents per share compared with $14 million or 16 cents in the prior year quarter. The bottom line beat the Zacks Consensus Estimate by 15 cents.

In 2024, the company reported a net loss of $39 million or a loss of 46 cents against a net income of $54 million or 63 cents per share.

U.S. Cellular's Revenues

The company generated $970 million in operating revenues compared with $1 billion in the prior-year quarter. Net sales were negatively affected by a decline in postpaid and prepaid retail connections. However, the top line beat the Zacks Consensus Estimate of $945 million.

In 2024, the company reported total revenues of $3.77 billion down from $3.906 billion in 2023.

Service revenues decreased to $742 million from $755 million in the prior-year quarter, beating the Zacks Consensus Estimate of $726.4 million. Equipment sales registered $228 million in revenues compared with $245 million in the prior-year quarter.

Fixed wireless customers grew 27% year over year to 145,000. Tower business witnessed healthy momentum during the quarter and registered revenues of $59 million, up 3% year over year. Management’s effort to diversify its third-party customer base is a positive factor.

Handset connections were 93,000, up from the prior-year quarter’s figure of 80,000. Handset churn rate was 1.08% compared with 1.22% a year ago. Connected devices were 47,000, down from 49,000 a year ago, while the churn rate was 2.67%, down from 3.03% in the year-ago quarter. Total postpaid connections declined to 3,985,000 from 4,106,000 in the year-earlier quarter. Total prepaid connections were 448,000, down from 451,000 in the year-ago quarter.

Postpaid average revenues per account declined to $131.10 from $131.63 in the year-ago quarter. Postpaid ARPU rose to $51.73 from $51.61 a year ago with postpaid churn rates of 1.29% and 1.44%, respectively. Prepaid ARPU was $30.59, down from $32.32 in the prior-year quarter. The prepaid churn rate decreased to 3.70% from 3.87% recorded in the year-ago quarter.

Quarterly Details of USM

Adjusted EBITDA in the quarter was $208 million, down from $233 million in the prior-year quarter. Adjusted OIBDA was $167 million, down from $194 million in the year-earlier quarter. Total operating expenses were $979 million, matching the prior year quarter's figure. The company reported an operating loss of $9 million against an operating income of $21 in the prior-year quarter.

U.S. Cellular's Cash Flow & Liquidity

In the December quarter, U.S. Cellular generated $121 million of cash from operating activities compared with $148 million in the year-ago quarter. In 2024, the company generated $883 million in cash from operations compared with $866 million in 2023.

As of Dec. 31, 2024, the company had $144 million in cash and cash equivalents and $2.83 billion in long-term debt compared with respective tallies of $150 million and $3.04 billion at the end of the prior year.

USM’s Zacks Rank & Stocks to Consider

USM currently has a Zacks Rank #3 (Hold).

Keysight Technologies, Inc. KEYS has a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications and rising adoption of driver-assistance systems globally.

InterDigital IDCC sports a Zacks Rank #1 at present. In the trailing four quarters, it delivered an earnings surprise of 158.41%.

It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions, used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Akamai Technologies, Inc. AKAM carries a Zacks Rank #2 at present. AKAM delivered an earnings surprise of 2.69%, on average, in the trailing four quarters. The company’s solutions accelerate and improve the delivery of content over the Internet, enabling faster response to requests for web pages, streaming of video & audio, business applications, etc. Its offerings are intended to reduce the impact of traffic congestion, bandwidth constraints and capacity limitations on customers.

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