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Telephone and Data Systems (TDS): Earnings Preview for Q4
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Telephone and Data Systems Inc. (TDS - Free Report) , a leading provider of telecommunications services, is slated to report fourth-quarter 2016 results on Feb 24, before the opening bell.
Over the past three months, shares of Telephone & Data Systems returned 21.49% compared with the Zacks-categorized Wireline - National industry’s gain of 18.32%.
Last quarter, the company posted a negative earnings surprise of 15.38%. However, the company’s earnings outpaced the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 9.76%.
Let’s see how things are shaping up for this announcement.
Factors at Play
We appreciate Telephone and Data Systems’ efforts to reward their shareholders with a fourth quarter 2016 dividend of $0.148 per Common Share and Series A Common Share. The payment was made on Dec 29, 2016, to shareholders of record as of Dec 16, 2016.
Telephone & Data Systems is striving to expand its business in the managed hosting and cloud service market through a new cloud-based storage service and managed IP connections. Also, Telephone and Data Systems’ flexible cash position and liquidity opens up scope for investments.
The launch of Shared Data plans for consumers and businesses at nominal prices have helped the company gain consumers. We expect to witness a similar addition of subscribers in the to-be reported quarter. The rollout of IPTV also bodes well. Moreover, the company experienced strong smartphone demand at its wireless wing – United States Cellular Corp. (USM - Free Report) .
The deal to purchase InterLinx Communications LLC will boost the fiber-optics suite of Telephone and Data Systems’s subsidiary, TDS Broadband Service LLC.
On the flip side, the company’s wireless division – U.S. Cellular – continues to operate in an intensely competitive wireless market and remains significantly challenged by the offering of service plans from lower-cost mobile operators. We further believe that high costs associated with network integration and construction of new cell sites, aggressive equipment pricing, increasing capacity in existing cell sites, wireless technology upgrades and spectrum licensing will put considerable pressure on the company’s finances.
The company’s dismissal performance in certain metrics in the last reported third quarter was a major setback. We look forward to whether these metrics perform better or worse in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Telephone and Data Systems is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Telephone and Data Systems has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 5 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Telephone and Data Systems has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Telephone and Data Systems, Inc. Price and EPS Surprise
Here are some companies in the Zacks-categorized broader ‘Utilities’ sector that have the right combination of elements to post an earnings beat this quarter.
However, Pinnacle West Capital’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 9.99%.
Spark Energy, Inc. is expected to release fourth-quarter 2016 results on Mar 9, 2017. The company has an Earnings ESP of +14.43% and a Zacks Rank #1. However, the company’s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 41.21%.
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Telephone and Data Systems (TDS): Earnings Preview for Q4
Telephone and Data Systems Inc. (TDS - Free Report) , a leading provider of telecommunications services, is slated to report fourth-quarter 2016 results on Feb 24, before the opening bell.
Over the past three months, shares of Telephone & Data Systems returned 21.49% compared with the Zacks-categorized Wireline - National industry’s gain of 18.32%.
Last quarter, the company posted a negative earnings surprise of 15.38%. However, the company’s earnings outpaced the Zacks Consensus Estimate in two of the previous four quarters, with an average beat of 9.76%.
Let’s see how things are shaping up for this announcement.
Factors at Play
We appreciate Telephone and Data Systems’ efforts to reward their shareholders with a fourth quarter 2016 dividend of $0.148 per Common Share and Series A Common Share. The payment was made on Dec 29, 2016, to shareholders of record as of Dec 16, 2016.
Telephone & Data Systems is striving to expand its business in the managed hosting and cloud service market through a new cloud-based storage service and managed IP connections. Also, Telephone and Data Systems’ flexible cash position and liquidity opens up scope for investments.
The launch of Shared Data plans for consumers and businesses at nominal prices have helped the company gain consumers. We expect to witness a similar addition of subscribers in the to-be reported quarter. The rollout of IPTV also bodes well. Moreover, the company experienced strong smartphone demand at its wireless wing – United States Cellular Corp. (USM - Free Report) .
The deal to purchase InterLinx Communications LLC will boost the fiber-optics suite of Telephone and Data Systems’s subsidiary, TDS Broadband Service LLC.
On the flip side, the company’s wireless division – U.S. Cellular – continues to operate in an intensely competitive wireless market and remains significantly challenged by the offering of service plans from lower-cost mobile operators. We further believe that high costs associated with network integration and construction of new cell sites, aggressive equipment pricing, increasing capacity in existing cell sites, wireless technology upgrades and spectrum licensing will put considerable pressure on the company’s finances.
The company’s dismissal performance in certain metrics in the last reported third quarter was a major setback. We look forward to whether these metrics perform better or worse in the to-be-reported quarter.
Earnings Whispers
Our proven model does not conclusively show that Telephone and Data Systems is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Telephone and Data Systems has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 5 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Telephone and Data Systems has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Telephone and Data Systems, Inc. Price and EPS Surprise
Telephone and Data Systems, Inc. Price and EPS Surprise | Telephone and Data Systems, Inc. Quote
Stocks to Consider
Here are some companies in the Zacks-categorized broader ‘Utilities’ sector that have the right combination of elements to post an earnings beat this quarter.
Pinnacle West Capital Corporation (PNW - Free Report) is expected to release fourth-quarter 2016 results on Feb 24, 2017. The company has an Earnings ESP of +2.04% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
However, Pinnacle West Capital’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 9.99%.
Spark Energy, Inc. is expected to release fourth-quarter 2016 results on Mar 9, 2017. The company has an Earnings ESP of +14.43% and a Zacks Rank #1. However, the company’s earnings lagged the Zacks Consensus Estimate in two of the previous four quarters, with an average miss of 41.21%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>