U.S. Cellular posts solid Q1 results

U.S. Cellular Corp. had a solid first quarter, with net customer additions in line with its results for the first quarter of 2006 and sequentially stronger than its performance in the fourth quarter of last year.
The carrier recorded 86,000 net new customer activations in the final quarter of 2006, and boosted that number to 152,000 customers in 2007’s first quarter, a figure up slightly from the 151,000 net additions that U.S. Cellular gained in the first quarter of last year. Of the 152,000 customers, 146,000 were retail subscribers. The company ended the quarter with nearly 5.4 million customers on its network.
U.S. Cellular’s postpaid churn rate held steady at 1.5%, where it has been for four of the past five quarters. Average revenue per user improved 5% year-over-year to $48.69.
Overall, the company’s service revenues grew 12% to $860.6 million compared with last year’s first quarter, and data revenues made up 9% of service revenues, reflecting a growth rate of 71%.
The carrier’s net income was up more than 88% year-over-year to $74 million, and the company reported operating income of $108 million, up 55% from the first quarter of 2006.
John Rooney, president and CEO of U.S. Cellular, noted that the company has now recorded five consecutive quarters of improving ARPU, and that U.S. Cellular rolled out 27 new handsets last year to stay competitive. The carrier purchased an existing market in northwest Iowa during the quarter, adding to its coverage area in that state.
Wall Street responded to the carrier’s results by pushing up its stock price by about 1.6% in midday trading, to around $74.50 per share.