Telephone and Data Systems, Inc. TDS posted modest third-quarter 2024 results, with the bottom line beating the Zacks Consensus Estimate but the top line missing the same. TDS reported a revenue decline year over year, owing to demand softness in the U.S. Cellular vertical.

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However, solid growth in residential broadband connections partially cushioned the top line. TDS Telecom deployed 32,000 marketable fiber addresses in the third quarter of 2024. Management’s focus on cost optimization is driving profitability.

Net Income

On a GAAP basis, the company reported a net loss of $83 million or 73 cents per share compared with a net loss of $17 million or 16 cents in the year-earlier quarter. Top-line decline and license impairment charges affected the net income.

Non-GAAP net income was $1 million or a penny per share against a loss of $18 million or 16 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 15 cents.

Telephone and Data Systems, Inc. Price, Consensus and EPS Surprise

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Revenues

Net sales in the quarter were $1.22 billion, down from $1.27 billion reported in the year-ago quarter. Declining revenues in the U.S. Cellular segment affected the top line. The figure fell short of the Zacks Consensus Estimate by $14 million.

Revenues from U.S. Cellular were $922 million, down 4% year over year. A reduction in postpaid retail and prepaid connections impeded the top line. However, growth in fixed wireless customers and tower revenues are positive factors. Net sales missed our revenue estimate of $927.8 million. Total cash expenses stood at $707 million, down from $746 million in the prior-year quarter.

The company reported an Operating loss of $90 million against an income of $57 million registered in the year-ago quarter. Postpaid average revenues per user (ARPU) rose to $52.04 from $51.11. Postpaid average revenues per account increased to $131.81 from $130.91 in the year-ago quarter. Prepaid ARPU was $32.01, down from $33.44 in the prior-year quarter.

TDS Telecom contributed $263 million to revenues compared with $256 million reported in the prior-year quarter. The top line fell short of our estimate of $266.6 million. Total residential connections stood at 946,100, down from 949,000 in the year-earlier quarter. Residential revenues per connection were $65.41, up from $62.15 in the prior-year quarter.

Total cash expenses were $182 million, down 4% year over year. Around 20% of customers opted for 1 Gigabit+ speed compared with the prior-year quarter’s tally of 14%. About 49% of users have chosen 100 Mbps or higher speed compared to 52% in the year-earlier quarter. Its broadband expansion rose to 115,300 from 79,400 a year ago. Total connections stood at 1,143,300 compared with 1,166,400 in the year-ago quarter.