Shares of United States Cellular (USM 1.69%) fell 17.4% on Friday after the mobile network operator delivered underwhelming results and forward guidance relative to Wall Street's expectations.
U.S. Cellular drove growth, improved profitability amid steep competition
U.S. Cellular's fourth-quarter 2023 revenue declined 4.6% year over year to exactly $1.0 billion, translating to net income of $14 million, or $0.16 per share (compared to a net loss of $0.33 per share in the same year-ago period). Analysts, on average, were only expecting net income of $0.04 per share on revenue of $984.2 million.
U.S. Cellular CEO Laurent Therivel lauded a 2% growth in postpaid average revenue per user and a 46% increase in fixed wireless customers to 114,000. Tower rental revenue also grew 8% year over year in 2023 to $100 million.
"Even though we experienced challenging subscriber results in an aggressive competitive environment, I'm pleased with the improvements we were able to drive in profitability year over year," Therivel added.
What's next for U.S. Cellular stock?
For the full-year 2024, U.S. Cellular issued guidance for service revenue in the range of $2.95 billion to $3.05 billion -- down at the midpoint from $3.044 billion in 2023 -- with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $920 million to $1.02 billion (compared to $986 million in 2023).
In the end, this wasn't exactly a terrible quarter from U.S. Cellular. But it didn't exactly give bullish investors much reason to celebrate, either. Though U.S. Cellular did indeed make some strides on the profitability front, investors will want to see more progress driving improved subscriber growth -- a tall order as it competes for subscribers with massive wireless industry leaders -- for the stock to regain any meaningful positive momentum.
