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Beat in Store for Telephone and Data Systems (TDS) Q4 Earnings?

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Telephone and Data Systems, Inc. (TDS - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 18, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 153.9%. It pulled off a trailing four-quarter earnings surprise of 148.5%, on average.

The Chicago, IL-based company is expected to have recorded higher revenues year over year. The performance is likely to have been driven by U.S. Cellular and TDS Telecom businesses. The TDS Enterprise continues to benefit from growth in essential communications and high-quality data services.

At U.S. Cellular, retail net additions grew through an increase in connected devices. The higher average revenue per user, along with cost discipline, is likely to have aided the company’s performance. TDS Telecom grew its wireline video and broadband connections, thanks to the rise in demand for higher broadband speeds.  

For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $1,358 million, indicating growth of 1.6% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 4 cents, which suggests a decline of 60%.

What Our Model Says

Our proven model predicts an earnings beat for Telephone and Data Systems this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Telephone and Data Systems’ Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +309.09% as the former is pegged at 15 cents and the latter at 4 cents.

Zacks Rank: Telephone and Data Systems currently carries a Zacks Rank #2.

Other Stocks to Consider

Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Dana Incorporated (DAN - Free Report) is slated to release fourth-quarter 2020 results on Feb 18. It has an Earnings ESP of +5.56% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Herc Holdings Inc. (HRI - Free Report) is scheduled to release fourth-quarter 2020 results on Feb 18. The company has an Earnings ESP of +9.63% and carries a Zacks Rank #2.

Targa Resources Corp. (TRGP - Free Report) has an Earnings ESP of +5.50% and a Zacks Rank of 2. The company is set to report fourth-quarter 2020 results on Feb 18.

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