Telephone And Data Systems Credits Q2 Profitability To 'Broadband Investments'

Telephone And Data Systems, Inc TDS reported second-quarter fiscal 2024 revenues of $1.238 billion, against the analyst consensus estimate of $1.240 billion. Revenues slumped 2% year-on-year. 

The company reported a loss of 13 cents, inline with the analyst consensus estimate.

UScellular revenues declined 3% to $927 million. Postpaid ARPU grew 2% to $51.45.

Also Read: T-Mobile’s $4.4B US Cellular And TDS Deal Promises Enhanced Rural 5G Coverage

Meanwhile, TDS Telecom segment revenues grew by 4% Y/Y at $267 million. Residential broadband connections grew 5% driven by broadband investments. Residential ARPU grew 5% due to price increases.

TDS Telecom segment delivered 27,000 fiber services addresses in the quarter and is making progress on the goal to deliver 125,000 fiber service addresses in 2024.

TDS exited the quarter with cash and equivalents worth $322 million. Long-term debt as of quarter-end was $4.10 billion. 

CEO LeRoy T. Carlson, Jr.: “In Q2, UScellular remained focused on balancing subscriber growth with financial discipline and reported solid ARPU growth, good expense discipline, and improved profitability – all combining to generate higher free cash flow. While postpaid handset subscribers declined in the quarter, UScellular saw a return to subscriber growth in prepaid and steady growth in fixed wireless.

“TDS Telecom reported another quarter of notable growth in revenue and profitability as a result of its broadband investments. TDS Telecom added an additional 27,000 marketable fiber service addresses and is making good progress on its long-term goal of 1.2 million marketable fiber service addresses.”  

FY24 Outlook: TDS expects UScellular service revenues of $2.95 billion-$3.05 billion, unchanged from the prior view.

Operating revenues forecast for TDS Telecom is $1.05 billion-$1.08 billion (prior $1.07 billion-$1.10 billion).

The total revenue consensus is $5.02 billion.

Telephone and Data Systems stock gained 169% in the last 12 months.

Price Action: TDS shares are trading lower by 1.47% to $20.80 premarket at last check Friday.