US Cellular 3Q profit up on higher data revenue

CHICAGO - Wireless carrier United States Cellular Corp. said Wednesday its third-quarter profit climbed nearly 42 percent, helped by higher service and data revenue and the sale of its stake in Rural Cellular Corp.

Net income grew to $89.9 million, or $1.02 per share, compared with $63.6 million, or 72 cents per share, a year ago.

Analysts surveyed by Thomson Reuters predicted earnings of 65 cents per share. Analysts' estimates typically exclude one-time items.

The Chicago-based company recorded a $16.4 million gain related to the August acquisition of Rural Cellular by Verizon Wireless. It received $45 per share for each Rural Cellular share owned. Verizon Wireless is a joint venture between Verizon Communications Inc. and Vodafone Group PLC.

Operating revenue climbed 7 percent to $1.09 billion. That results beat Wall Street's estimate of $1.08 billion.

The company said service revenue improved 6.2 percent to $1.01 billion and data revenue surged 34.5 percent to $130.2 million.

President and Chief Executive John E. Rooney said in a statement that store traffic slowed and the quarter's 12,000 retail postpay customer additions were fewer than expected. Those factors, combined with some losses in the prepaid customer division, resulted in the company reporting a customer loss for the quarter.

Churn for retail postpay customers, which comprise about 95 percent of the company's retail customers, was flat at 1.6 percent.

Customer churn is the percentage of customers who discontinued service.

The company anticipates full-year retail customer additions between 125,000 and 160,000. Service revenue is forecast between $3.93 billion and $4 billion.

Shares of United States Cellular rose $1.29, or 3.2 percent, to $41.55 in morning trading.

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