The Gory Details of United States Cellular's Earnings Miss (USM)

The Gory Details of United States Cellular's Earnings Miss

United States Cellular (NYSE: USM ) reported earnings on Aug. 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), United States Cellular beat slightly on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue increased slightly and GAAP earnings per share shrank significantly.

Margins dropped across the board.

Revenue details
United States Cellular logged revenue of $1.10 billion. The four analysts polled by S&P Capital IQ wanted to see a top line of $1.09 billion on the same basis. GAAP reported sales were 2.6% higher than the prior-year quarter's $1.08 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.62. The six earnings estimates compiled by S&P Capital IQ anticipated $0.69 per share. GAAP EPS of $0.62 for Q2 were 30% lower than the prior-year quarter's $0.88 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 60.6%, 240 basis points worse than the prior-year quarter. Operating margin was 7.9%, 200 basis points worse than the prior-year quarter. Net margin was 4.8%, 220 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.11 billion. On the bottom line, the average EPS estimate is $0.54.

Next year's average estimate for revenue is $4.41 billion. The average EPS estimate is $2.18.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 35 members out of 59 rating the stock outperform, and 24 members rating it underperform. Among 11 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), seven give United States Cellular a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on United States Cellular is hold, with an average price target of $38.50.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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