United States Cellular Corporation (USM) saw its loss widen to $6 million, or $0.07 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $2 million, or $0.02 a share.
Revenue during the quarter went up marginally by 0.41 percent to $991 million from $987 million in the previous year period. Gross margin for the quarter contracted 62 basis points over the previous year period to 52.47 percent. Operating margin for the quarter stood at negative 2.93 percent as compared to a negative 2.43 percent for the previous year period.
Operating loss for the quarter was $29 million, compared with an operating loss of $24 million in the previous year period.
"2016 was a year of continued progress for U.S. Cellular," said Kenneth R. Meyers, U.S. Cellular President and chief executive officer. "Our local and personal approach to providing an exceptional customer experience continues to stand out, generating consistently low-levels of phone churn each quarter. As some of the most competitive pricing promotions persist across the industry, we have worked to balance growth and profitability, which enabled us to hit our profitability targets, albeit with slower customer growth."
For financial year 2017, United States Cellular Corp expects revenue to be in the range of $3,800 million to $4,000 million.
Operating cash flow declines
United States Cellular Corp has generated cash of $501 million from operating activities during the year, down 9.73 percent or $54 million, when compared with the last year. The company has spent $618 million cash to meet investing activities during the year as against cash outgo of $549 million in the last year.
The company has spent $12 million cash to carry out financing activities during the year as against cash inflow of $497 million in the last year period.
Cash and cash equivalents stood at $586 million as on Dec. 31, 2016, down 18.04 percent or $129 million from $715 million on Dec. 31, 2015.
Working capital declines
United States Cellular Corp has witnessed a decline in the working capital over the last year. It stood at $840 million as at Dec. 31, 2016, down 9.06 percent or $83.70 million from $923.70 million on Dec. 31, 2015. Current ratio was at 2.17 as on Dec. 31, 2016, down from 2.24 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 17 days for the quarter from 19 days for the last year period. Days sales outstanding went up to 34 days for the quarter compared with 31 days for the same period last year.
Days inventory outstanding has decreased to 13 days for the quarter compared with 15 days for the previous year period. At the same time, days payable outstanding went up to 30 days for the quarter from 27 for the same period last year.
Debt remains almost stable
United States Cellular Corp has recorded a decline in total debt over the last one year. It stood at $1,629 million as on Dec. 31, 2016, down 0.67 percent or $11 million from $1,640 million on Dec. 31, 2015. Total debt was 22.91 percent of total assets as on Dec. 31, 2016, compared with 23.23 percent on Dec. 31, 2015. Debt to equity ratio was at 0.45 as on Dec. 31, 2016, down from 0.46 as on Dec. 31, 2015.
