US Cellular profit soared 31.5 per cent year-on-year in Q1, buoyed by tax benefits offered as part of a government stimulus intended to combat the economic impact of Covid-19 (coronavirus).
Net income attributable to shareholders of $71 million was up from $54 million in Q1 2019, while revenue declined marginally from $966 million to $963 million.
On an earnings call, CEO Kenneth Meyers expressed optimism the company will continue to successfully manage through the remainder of 2020 despite the pandemic. Though he said he has never “experienced the level of disruption and uncertainty that we’re going through today”, he said activity in April had moved “towards stable. Different but stable”.
While 70 per cent of US Cellular’s stores remain open, Meyers said customer traffic was about half the level prior to the pandemic. He noted the operator’s handset supply chain is “operating smoothly”, but said stocks of Wi-Fi routers and hotspots is constrained.
The executive added VoLTE and 5G upgrades remained on track, despite localised delays related to government office closures.
Looking ahead, he said US Cellular expects “some impact” on service revenue due to its decision to waive overage fees for customers, and also expects a drop in equipment sales corresponding with lower store traffic.
However, the company maintained its full-year service revenue guidance of between $3 billion and $3.1 billion, and capex in the range of $850 million to $950 million.