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Telephone and Data Systems (TDS) Q4 Earnings Top Estimates
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Telephone and Data Systems, Inc. (TDS - Free Report) reported impressive fourth-quarter 2020 results, wherein the top and the bottom lines beat the respective Zacks Consensus Estimate.
Net Income
Net income in the December quarter was $14 million or 12 cents per share compared with $12 million or 10 cents per share in the year-ago quarter. Also, the bottom line beat the Zacks Consensus Estimate by 8 cents.
Telephone and Data Systems, Inc. Price, Consensus and EPS Surprise
In 2020, net income was $226 million or $1.93 per share compared with $121 million or $1.03 per share in 2019.
Revenues
Quarterly total operating revenues increased 3% year over year to $1,376 million, driven by the U.S. Cellular and TDS Telecom businesses. Further, the top line beat the consensus estimate of $1,358 million.
In 2020, revenues inched up 1% year over year to $5,225 million.
Quarterly Segment Results
Revenues in U.S. Cellular grew 2% year over year to $1,073 million, primarily driven by higher average revenue per user (ARPU) as customers took higher-value services. Total operating expenses increased to $1,069 million from $1,055 million. Operating income improved to $4 million from a loss of $3 million in the year-ago quarter. Postpaid ARPU improved to $47.51 from $46.57, while average revenue per account rose to $124.87 from $120.99. Prepaid ARPU increased to $35.15 from $34.11 in the prior-year quarter.
Revenues in TDS Telecom were $248 million, up 5.5% year over year driven by considerable growth in residential customer connections. This reflects increased consumer demand for broadband services caused by the shift to remote work and learning. Revenues from wireline were $173 million, up 1.2%, mainly driven by accretive video connections with multiyear fiber footprint expansions. Cable revenues were $76 million, up 18.8% year over year. The upside was driven by significant growth through the Continuum acquisition and increase in broadband penetration.
Cash Flow & Liquidity
In 2020, Telephone and Data Systems generated $1,532 million of cash from operations compared with $1,016 million in 2019. Non-GAAP free cash flow totaled $194 million compared with $59 million a year ago.
As of Dec 31, 2020, the company had $1,429 million in cash and cash equivalents with $3,424 million of long-term debt. This compares with the respective tallies of $465 million and $2,316 million a year ago.
2021 Outlook
For 2021, the company expects total operating revenues in TDS Telecom in the range of $975-$1,025 million. Adjusted EBITDA is projected to be $290-$320 million. Adjusted OIBDA is anticipated to be $290-$320 million. Capital expenditures are estimated in the band of $425-$475 million.
For 2021, service revenues in U.S. Cellular are expected in the range of $3,025-$3,125 million. Adjusted EBITDA is projected to be $975-$1,125 million. Adjusted OIBDA is anticipated to be $800-$950 million. Capital expenditures are estimated in the band of $775-$875 million.
Zacks Rank & Other Stocks to Consider
Telephone and Data Systems currently carries a Zacks Rank #2 (Buy).
Aviat Networks delivered a trailing four-quarter earnings surprise of 61.7%, on average.
Plantronics delivered a trailing four-quarter earnings surprise of 560.4%, on average.
Ubiquiti delivered a trailing four-quarter earnings surprise of 37.1%, on average.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Telephone and Data Systems (TDS) Q4 Earnings Top Estimates
Telephone and Data Systems, Inc. (TDS - Free Report) reported impressive fourth-quarter 2020 results, wherein the top and the bottom lines beat the respective Zacks Consensus Estimate.
Net Income
Net income in the December quarter was $14 million or 12 cents per share compared with $12 million or 10 cents per share in the year-ago quarter. Also, the bottom line beat the Zacks Consensus Estimate by 8 cents.
Telephone and Data Systems, Inc. Price, Consensus and EPS Surprise
Telephone and Data Systems, Inc. price-consensus-eps-surprise-chart | Telephone and Data Systems, Inc. Quote
In 2020, net income was $226 million or $1.93 per share compared with $121 million or $1.03 per share in 2019.
Revenues
Quarterly total operating revenues increased 3% year over year to $1,376 million, driven by the U.S. Cellular and TDS Telecom businesses. Further, the top line beat the consensus estimate of $1,358 million.
In 2020, revenues inched up 1% year over year to $5,225 million.
Quarterly Segment Results
Revenues in U.S. Cellular grew 2% year over year to $1,073 million, primarily driven by higher average revenue per user (ARPU) as customers took higher-value services. Total operating expenses increased to $1,069 million from $1,055 million. Operating income improved to $4 million from a loss of $3 million in the year-ago quarter. Postpaid ARPU improved to $47.51 from $46.57, while average revenue per account rose to $124.87 from $120.99. Prepaid ARPU increased to $35.15 from $34.11 in the prior-year quarter.
Revenues in TDS Telecom were $248 million, up 5.5% year over year driven by considerable growth in residential customer connections. This reflects increased consumer demand for broadband services caused by the shift to remote work and learning. Revenues from wireline were $173 million, up 1.2%, mainly driven by accretive video connections with multiyear fiber footprint expansions. Cable revenues were $76 million, up 18.8% year over year. The upside was driven by significant growth through the Continuum acquisition and increase in broadband penetration.
Cash Flow & Liquidity
In 2020, Telephone and Data Systems generated $1,532 million of cash from operations compared with $1,016 million in 2019. Non-GAAP free cash flow totaled $194 million compared with $59 million a year ago.
As of Dec 31, 2020, the company had $1,429 million in cash and cash equivalents with $3,424 million of long-term debt. This compares with the respective tallies of $465 million and $2,316 million a year ago.
2021 Outlook
For 2021, the company expects total operating revenues in TDS Telecom in the range of $975-$1,025 million. Adjusted EBITDA is projected to be $290-$320 million. Adjusted OIBDA is anticipated to be $290-$320 million. Capital expenditures are estimated in the band of $425-$475 million.
For 2021, service revenues in U.S. Cellular are expected in the range of $3,025-$3,125 million. Adjusted EBITDA is projected to be $975-$1,125 million. Adjusted OIBDA is anticipated to be $800-$950 million. Capital expenditures are estimated in the band of $775-$875 million.
Zacks Rank & Other Stocks to Consider
Telephone and Data Systems currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader industry are Aviat Networks (AVNW - Free Report) , Plantronics and Ubiquiti (UI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aviat Networks delivered a trailing four-quarter earnings surprise of 61.7%, on average.
Plantronics delivered a trailing four-quarter earnings surprise of 560.4%, on average.
Ubiquiti delivered a trailing four-quarter earnings surprise of 37.1%, on average.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>