Telephone and Data Systems Q4 Earnings Beat Despite Lower Revenues

Core Insights - Telephone and Data Systems, Inc. (TDS) reported strong fourth-quarter 2024 results, with both revenue and net income exceeding Zacks Consensus Estimates despite a year-over-year revenue decline due to softness in the U.S. Cellular segment [1][5]. Financial Performance - TDS generated net sales of $1.24 billion in the fourth quarter, down from $1.31 billion in the same quarter last year, but beat the Zacks Consensus Estimate by $14 million [5]. - The company reported a GAAP net loss of $11 million or 10 cents per share, significantly improved from a net loss of $523 million or $4.64 per share in the year-ago quarter [3][4]. - For the full year 2024, TDS reported revenues of $4.96 billion, down from $5.2 billion in 2023 [5]. Segment Performance - U.S. Cellular revenues were $970 million, a 3% decline year-over-year, impacted by reduced postpaid retail and prepaid connections, although growth in fixed wireless customers and tower revenues provided some offset [6]. - TDS Telecom contributed $264 million to revenues, slightly up from $261 million in the prior-year quarter, but fell short of the estimate of $266.9 million [8]. Cost Management - The company focused on cost optimization, resulting in lower operating expenses, which contributed to a narrower loss during the quarter [3][10]. - Total cash expenses were $811 million, marginally down from $812 million in the prior-year quarter [6]. Customer Metrics - Total residential connections decreased to 935,600 from 952,900 in the year-ago quarter, while residential revenues per connection increased to $64.72 from $62.74 [8]. - The company saw an increase in customers opting for higher-speed broadband, with 22% choosing 1 Gigabit+ speed compared to 16% in the prior-year quarter [9]. Cash Flow and Outlook - TDS generated $1.145 billion of net cash from operating activities in 2024, slightly up from $1.142 billion in the prior-year quarter [12]. - For 2025, management expects total operating revenues at TDS Telecom to be in the range of $1.03-$1.07 billion, with adjusted EBITDA estimated between $320-$360 million [13].