What's Going On With TDS And UScellular Stock Today?

Telephone And Data Systems, Inc. TDS stock jumped over 28% Friday morning following the decision to explore strategic alternatives for United States Cellular Corporation USM.

TDS and UScellular have each decided to initiate a comprehensive process to study options.

At the end of the second quarter, Telephone and Data Systems owned 83% of UScellular.

TDS Q2 Results: TDS reported Q2 FY23 revenues of $1.267 billion, missing the consensus of $1.310 billion. Revenues slumped 6% Y/Y. The company reported an adjusted loss of $(0.17), missing the consensus of ($0.04) loss.

USM Q2 Results UScellular reported quarterly earnings of $0.05 per share, which missed the analyst consensus of $0.21.

Operating revenues at UScellular slumped 7% Y/Y to $957 million. Fixed Wireless customers grew 66% to 96,000.

Meanwhile, TDS' operating revenues at the TDS Telecom segment inched up by 1% to $257 million. The segment delivered 66,000 fiber service addresses through June, remaining on track to have 175,000 fiber addresses by the end of 2023.

TDS exited the quarter with cash and equivalents worth $251 million. Long-term debt as of quarter-end was $3.872 billion. 

FY23 Outlook

TDS sees FY23 UScellular sales of $3.025 billion-$3.075 billion (prior view: $3.050 billion-$3.150 billion).

Operating revenues forecast for TDS Telecom is unchanged in the range of $1.03 billion-$1.06 billion.

Price Action: TDS shares are trading higher by 27.8% to $10.10 in the premarket on the last checked Friday, while USM shares are trading higher by 34.34% to $23.51.