What Happened?
Shares of wireless telecommunications provider U.S. Cellular (NYSE:USM) jumped 4.6% in the morning session after the company reported second-quarter 2025 results that surpassed analyst expectations on both revenue and profit. The regional wireless provider posted revenue of $916 million and earnings per share (EPS) of $0.36, beating Wall Street's consensus estimates by 1.5% and 7.7%, respectively. The profit result marked a significant improvement from the $0.19 per share earned in the same quarter last year. Investors also reacted positively to a substantial increase in cash generation, with the company's free cash flow margin jumping to 27.3% from 19% a year ago. Despite the positive quarter, the results were mixed, as total revenue still fell by 1.2% year-over-year, continuing a multi-year trend of sales declines for the wireless carrier.
After the initial pop the shares cooled down to $75.59, up 1.7% from previous close.
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What Is The Market Telling Us
U.S. Cellular’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock dropped 3.7% on the news that a surprisingly weak U.S. jobs report was released, fueling concerns about a slowing economy. The U.S. economy added only 73,000 jobs, falling significantly short of economists' expectations, while figures for May and June were revised down, erasing 258,000 previously reported jobs. The professional and business services industry itself shed 14,000 jobs. This data points to a cooling labor market, fueling concerns of a slowing economy. A weaker economic outlook often leads to reduced corporate spending on key services like IT consulting and professional staffing, which directly impacts the sector's revenue and growth prospects. The report immediately increased investor expectations of an interest rate cut by the Federal Reserve.
U.S. Cellular is up 19.3% since the beginning of the year, and at $75.59 per share, has set a new 52-week high. Investors who bought $1,000 worth of U.S. Cellular’s shares 5 years ago would now be looking at an investment worth $2,143.
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