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Telephone and Data Systems (TDS) Q1 Earnings Beat Estimates

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Telephone and Data Systems, Inc. TDS reported mixed results for the first quarter of 2018.

Net income came in at $39 million or 34 cents per share compared with $37 million or 33 cents in the year-ago quarter, comfortably beating the Zacks Consensus Estimate of 18 cents.

Total operating revenues for the reported quarter were $1,225 million compared with $1,238 million in the prior-year quarter, missing the Zacks Consensus Estimate of $1,250 million.
 

Telephone and Data Systems, Inc. Price, Consensus and EPS Surprise

 

Telephone and Data Systems, Inc. Price, Consensus and EPS Surprise | Telephone and Data Systems, Inc. Quote

United States Cellular Division

Quarterly total revenues from United States Cellular Corporation USM division were $942 million, up 1% year over year.

Total operating expenses decreased 1% year over year to $877 million. Operating income was $65 million compared with $54 million in the year-ago quarter.

TDS Division

In the reported quarter, total operating revenues came in at $231 million, up 1% year over year, primarily due to continued growth in the broadband product mix as well as in video connections.

Within the segment, revenues from wireline came in at $175 million, down 2% year over year, due to lower CLEC sales and decline in special access services.

Cable revenues were $56 million, reflecting an increase of 12%, primarily driven by growth in residential connections.

Cash Flow & Liquidity

During the first quarter, Telephone and Data Systems generated $214 million of cash from operations compared with $137 million in the year-ago quarter. As of Mar 31, 2018, free cash flow was $83 million compared with $10 million at the end of Mar 31, 2017. Net long-term debt at quarter end was $2,431 million with cash and cash equivalents of $779 million.

Guidance Reiterated

For full-year 2018, Telephone and Data Systems reiterated its earlier guidance and continues to expect total operating revenues in the range of $5,015-$5,265 million. Adjusted EBITDA is projected to be $1,075-$1,255 million while capital expenditure is estimated between $795 million and $845 million. The company projects adjusted OIBDA in the range of $925-$1,105 million.

The company accomplished a number of initiatives in the quarter operationally. It launched Voice over LTE in the Wisconsin market and readied networks in California, Oregon and Washington with VoLTE. Based upon the successful market test last year, TDS launched 4G fixed wireless services across most of its footprint.

Telephone and Data Systems currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader industry include South Jersey Industries, Inc. SJI, sporting a Zacks Rank #1 (Strong Buy) and Chesapeake Utilities Corporation CPK, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

South Jersey Industries has an expected long-term earnings growth rate of 12.4%.

Chesapeake Utilities has an expected long-term earnings growth rate of 6%.

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