Telephone and Data Systems Reports Mixed Performance Amid Challenges

CHICAGO, Ill. — Telephone and Data Systems, Inc. (TDS) announced fourth-quarter 2024 financial results, revealing a mixed performance marked by revenue declines but improved cost efficiency. Despite a year-over-year drop in revenue, the company beat earnings estimates.

TDS reported revenue of $1.24 billion for the quarter, down from $1.31 billion in the previous year due to a decrease in demand within the U.S. Cellular segment. However, the figure exceeded the Zacks Consensus Estimate by $14 million. The company’s net loss narrowed to $11 million, or 10 cents per share, compared to a loss of $523 million, or $4.64 per share, in the year-ago quarter.

Management attributed the improvement in profitability to cost optimization efforts and growth in residential broadband connections, which partially offset the revenue decline. In 2024, TDS Telecom added 129,000 marketable fiber addresses and experienced a total of 935,600 residential connections, although this represented a decrease from 952,900 a year earlier.

“Despite facing challenges in the U.S. Cellular segment, our focus on cost discipline and expansion in our fiber offerings has led to a more manageable loss,” said management in a statement.

The company generated adjustments showing a net loss was $10 million or 9 cents per share when excluding special items. This figure beat the Zacks Consensus Estimate by 23 cents.

For the full-year results, TDS reported a GAAP net loss of $97 million, or 85 cents per share, improving from a loss of $569 million, or $5.06 per share, in 2023. Non-GAAP measures showed a loss of $12 million or 11 cents per share compared to a loss of $59 million, or 53 cents per share, year-over-year.

U.S. Cellular segment revenues stood at $970 million, reflecting a 3% decline due to reductions in postpaid retail and prepaid subscribers, although an uptick in fixed wireless customers helped lessen the impact. Average revenues per user (ARPU) saw slight increases in postpaid connections while prepaid ARPU slipped.

In the last quarter, TDS Telecom reported revenue contributions of $264 million, marginally exceeding previous tallies but falling short of analysts’ expectations. Total operating expenses were cut by 35%, aiding the transition from an operating loss to a reported income of $37 million.

Looking forward, management projects total operating revenues for TDS Telecom between $1.03-$1.07 billion for 2025, with adjusted EBITDA estimated in the range of $320-$360 million. They anticipate capital expenditures of $375-$425 million as they navigate ongoing market challenges.

Notably, due to pending transactions with T-Mobile, TDS refrained from providing specific guidance for the U.S. Cellular segment. The company currently holds a Zacks Rank of #1 (Strong Buy).