Rural Cellular increases 1Q operating income
April 13 (SmallCapInvestor.com) – Shares of Rural Cellular Corporation (Nasdaq: RCCC) have moved into positive territory on news the wireless communications provider reported an increase in preliminary first-quarter operating income.
Service revenue for the first quarter ended March 31, 2007, was $98 million, an increase of 2.1% from $96 million last year, Alexandria, Minn.-based Rural Cellular said before the opening bell. Revenue from roaming came to $36 million, a rise of 16% compared with $31 in the same quarter a year earlier.
Improved revenues helped the company record operating income without giving effect to depreciation, amortization, and stock-based compensation of approximately $59 million, an increase of 12% compared with $52.4 million in the previous quarter.
Rural Cellular also reported that total customers increased 9,974 during the first quarter of 2007 to 715,632. Local service revenue per customer increased to $52, compared with $51 during the same quarter of 2006. The company attributed the increase to higher data revenue.
Additionally, Rural Cellular said that on May 15, 2007, it will exchange all the outstanding shares of its 11 3/8% senior exchangeable preferred stock for 11 3/8% senior subordinated debentures. The notes are set to mature on May 15, 2010. The company will pay interest on the new debentures semi-annually on May 15 and November 15. Rural Cellular will pay all accrued dividends on the senior preferred stock.
At 12:43 ET shares were up $2.05, or 14.55%, to $16.14. The 52-week high is $17.00, set on May 4, 2006. The 52-week low of $6.38 was reached on Aug. 14, 2006.
