UScellular Reports Challenging Q3 2024 with 4% Revenue Decline and Significant Operating Loss

UScellular Corp reported a challenging third quarter for 2024, with total operating revenues of $922 million, a 4% decrease from $963 million in Q3 2023. For the nine months ended September 30, 2024, revenues also fell by 4% to $2,799 million compared to $2,906 million in the same period last year. The wireless segment specifically saw revenues decline from $938 million in Q3 2023 to $896 million in Q3 2024, reflecting competitive pressures and a decrease in average postpaid and prepaid connections.

The company experienced a significant operating loss of $90 million in Q3 2024, contrasting sharply with an operating income of $57 million in Q3 2023. For the nine-month period, the operating loss was $3 million, down from an operating income of $117 million in the previous year. The net loss attributable to UScellular shareholders was $79 million for Q3 2024, compared to a net income of $23 million in Q3 2023, and a net loss of $44 million for the nine months ended September 30, 2024, compared to a net income of $40 million in 2023.

UScellular's total operating expenses increased by 12% to $1,012 million in Q3 2024, driven by higher system operations costs and third-party expenses related to strategic alternatives reviews. The company recorded a non-cash impairment charge of $136 million related to wireless spectrum licenses, which significantly impacted profitability.

Strategically, UScellular is undergoing significant changes, including the planned sale of its wireless operations and select spectrum assets to T-Mobile for $4.4 billion, expected to close in mid-2025. Additionally, a License Purchase Agreement with Verizon for spectrum licenses is anticipated to generate $1 billion, contingent on regulatory approval. These transactions are part of UScellular's efforts to enhance its market position and streamline operations.

Despite the revenue declines, UScellular reported an increase in adjusted OIBDA, which rose by 1% to $222 million in Q3 2024 and by 9% to $678 million for the nine months ended September 30, 2024. The company also noted improvements in postpaid Average Revenue Per User (ARPU) and Average Revenue Per Account (ARPA), attributed to a favorable mix of plans and product offerings.

As of September 30, 2024, UScellular's cash and cash equivalents increased to $272 million, up from $150 million at the end of 2023. The company continues to face challenges in a competitive environment, with expectations of ongoing pricing pressures impacting future performance.