NEW YORK ( TheStreet) -- United States Cellular Corporation (NYSE: USM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- US CELLULAR CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, US CELLULAR CORP increased its bottom line by earning $2.06 versus $1.56 in the prior year. This year, the market expects an improvement in earnings ($2.08 versus $2.06).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Wireless Telecommunication Services industry. The net income increased by 77.7% when compared to the same quarter one year prior, rising from $35.16 million to $62.49 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- USM's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, USM has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $256.97 million or 27.32% when compared to the same quarter last year. In addition, US CELLULAR CORP has also vastly surpassed the industry average cash flow growth rate of -24.58%.
-- Written by a member of TheStreet Ratings Staff