Core Viewpoint - Verizon Communications has shown improvement in its stock performance following solid second quarter results and positive guidance, with a year-to-date stock price increase of approximately 7% and a yield exceeding 6% [1] Financial Performance - Verizon's Q2 revenue increased by 5.2% to $34.5 billion, surpassing analyst expectations of $33.74 billion [6] - Wireless service revenue rose by 2.2% to $20.9 billion, while wireless equipment revenue surged by 25.2% to $6.3 billion [6] - Adjusted earnings per share (EPS) climbed 6% to $1.22, and adjusted EBITDA rose 4.1% to $12.8 billion [6] Subscriber Growth - The broadband business led growth, adding 293,000 net broadband subscribers, totaling 12.9 million, a year-over-year increase of over 12% [3] - The consumer wireless segment lost 51,000 postpaid subscribers but gained 50,000 prepaid subscribers [4] - Business service revenue increased by 1.6% to $3.6 billion, with 65,000 wireless retail postpaid net additions [5] Future Guidance - Verizon maintained its full-year 2025 wireless revenue growth forecast of 2% to 2.8% and increased the low end of its adjusted EPS growth forecast to 1% to 3% [7] - The company raised its operating cash flow outlook to between $37 billion and $39 billion, leading to a projected free cash flow of $19.5 billion to $20.5 billion [8][9] Dividend and Cash Flow - Verizon's dividend yield is approximately 6.4%, with a coverage ratio of 1.5x based on $8.8 billion in free cash flow generated in the first half of the year against $5.7 billion in dividends paid [10] - The company benefits from new tax legislation allowing for immediate 100% depreciation of certain assets, enhancing cash flow [11] Strategic Acquisitions - Verizon's acquisition of Frontier Communications is expected to significantly expand its fiber network, particularly in states like Florida, Texas, and California, enhancing its ability to bundle mobile and home internet services [14][15] Valuation - Verizon trades at a forward price-to-earnings (P/E) ratio of 9x based on 2025 earnings estimates, which is below AT&T's 13x multiple, indicating potential upside [16]

Core Insights - Investors are encouraged by recent earnings reports from Verizon and American Express, with Verizon raising earnings guidance for the latter half of 2025 and American Express achieving record second-quarter revenue [1][2] Group 1: Verizon - Verizon has raised its dividend payout for 18 consecutive years, currently offering a 6.3% dividend yield, although the quarterly payment has only increased by 19.9% over the past decade [4][6] - The wireless service revenue grew by 2.2% year-over-year, while broadband connections increased by 12.2% to 12.9 million [5] - Free cash flow is projected to reach $4.74 per share in 2025, sufficient to cover the current annual dividend obligation of $2.71 [6] Group 2: American Express - American Express has a lower dividend yield of 1.1% but has increased its payout by 17% earlier this year, with a total increase of 183% over the past decade [7][8] - The company has reduced its share count by 29.4% over the last ten years, facilitating easier management of future payout increases [8] - American Express is positioned to benefit from steady growth as one of four global credit card networks, with recent initiatives like the Coinbase One Card enhancing its competitive stance [10][11] Group 3: Investment Considerations - The choice between Verizon and American Express depends on the investor's time horizon; American Express offers strong historical growth but a low current yield, while Verizon provides a higher yield with slower growth [12][13] - Projecting future yields, American Express could yield around 3.6% by 2045, while Verizon could yield 9.1% by the same year, making Verizon potentially more attractive for income-seeking investors [12][14]

Financial Performance - Telephone and Data Systems, Inc. (TDS) reported a net loss of $10 million or 9 cents per share for Q1 2025, compared to a net income of $12 million or 10 cents in the same quarter last year, missing the Zacks Consensus Estimate by 7 cents [2] - Total revenues were $1.15 billion, down from $1.26 billion year-over-year, missing the Zacks Consensus Estimate by $39 million [2] - U.S. Cellular revenues decreased by 6% year-over-year to $891 million, impacted by a reduction in postpaid retail and prepaid connections, and also missed revenue estimates of $920.5 million [3] Operating Metrics - TDS reported an operating income of $41 million, down from $51 million in the prior-year quarter, with total operating expenses at $1.11 billion, down 6% year-over-year [4][7] - Adjusted EBITDA for TDS Telecom was $76 million, a decrease of 20% year-over-year, while U.S. Cellular's adjusted EBITDA decreased by 7% to $254 million [7] Customer Metrics - Total residential connections decreased to 931,400 from 956,100 year-over-year, while residential revenues per connection increased to $65.67 from $64.58 [5] - The company saw an increase in broadband expansion, with total connections at 1,119,000 compared to 1,162,200 in the year-ago quarter [6] Cash Flow and Liquidity - TDS generated $186 million of net cash from operating activities in Q1 2025, down from $224 million in the prior-year quarter, with cash and cash equivalents at $348 million and long-term debt at $4.04 billion as of March 31, 2025 [8] Outlook - For 2025, management expects total operating revenues for TDS Telecom to be in the range of $1.03-$1.07 billion, with adjusted EBITDA estimated between $320-$360 million and capital expenditures expected to be $375-$425 million [10]

Financial Data and Key Metrics Changes - The company reported a free cash flow of $79 million in Q1 2025, an increase of $18 million compared to the same quarter last year [16] - Total operating revenues decreased by 3% year over year, impacted by divestitures and declines in commercial and wholesale revenue [49] - Cash expenses increased by 6% or $11 million in the quarter compared to the prior year, with part of this increase attributed to a non-cash adjustment to stock-based compensation [49] Business Line Data and Key Metrics Changes - The company saw a 6% increase in third-party tower revenue due to new co-locations and escalators on renewed leases [15] - Fiber service addresses grew by 6% year over year, with 14,000 new addresses delivered in the quarter [39] - Residential broadband net additions were 2,800, with 8,300 coming from fiber markets, lower than prior quarters due to timing of service address delivery [40] Market Data and Key Metrics Changes - The company is experiencing competitive pressures in the broadband market, with aggressive pricing and promotional offers from competitors [17] - The demand for higher broadband speeds remains strong, with 82% of residential broadband customers taking 100 meg or higher [47] Company Strategy and Development Direction - The company is focused on completing the transaction with T-Mobile and repositioning the remaining business for future success [12] - There is an ongoing effort to expand the fiber program, which has increased the footprint by over 30% in the last three years [13] - The company plans to declare a special dividend to shareholders following the closing of the T-Mobile transaction, subject to board approval [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainties in the broader economy and markets but remains optimistic about the long-term potential of the tower business [15] - The company is focused on cost optimization and expects capital expenditures to decline in 2025 as planned 5G coverage builds are largely completed [16] - Management expressed confidence in achieving $100 million in annual cost savings by the end of 2028 through transformation efforts [41] Other Important Information - The company does not plan to redeem Series UU and Series BV preferred stock, viewing them as foundational capital [74] - The expected cash outflow related to severance obligations for employees not retained by T-Mobile is estimated to be between $60 million to $80 million [30] Q&A Session Summary Question: What is the timeline for the designated entity spectrum approval? - The timing is uncertain and dependent on regulatory approval by the FCC, but there is optimism for a positive outcome [60] Question: How should free cash flow be viewed going forward? - The reported free cash flow of $79 million is not necessarily a run rate, but capital expenditures are expected to be down in 2025, which is positive for free cash flow [62] Question: What are the expectations for the tower company reporting post-closing? - The company anticipates providing tower company reporting including AFFO and related metrics in the first quarter after the close [65] Question: How is the door-to-door sales effort performing? - The company has strengthened its sales teams and expects net adds to improve as fiber address delivery ramps up [68] Question: Why does US Cellular need to remain a public entity? - The incremental cost to operate as a public company is minimal, and there are no significant incentives to collapse the structure at this time [112]

Financial Data and Key Metrics Changes - Total operating revenues decreased by 3% year over year, impacted by divestitures and declines in commercial and wholesale revenue, as well as decreases in residential video and voice connections [44] - Free cash flow for Q1 2025 was $79 million, an increase of $18 million compared to the same quarter last year [13][19] - Cash expenses increased by 6% or $11 million compared to the prior year, with $4 million of this increase attributed to a cumulative non-cash adjustment to stock-based compensation [44] Business Line Data and Key Metrics Changes - Postpaid handset results showed year-over-year improvements, while third-party tower revenues increased by 6% due to new co-locations and escalators on renewed leases [12] - Fiber service addresses grew by 6% year over year, with 14,000 new addresses delivered in the quarter [33][42] - Residential broadband net additions were 2,800, with 8,300 coming from fiber markets, lower than prior quarters due to timing of service address delivery [34][38] Market Data and Key Metrics Changes - The company continues to face aggressive promotional competition in the wireless industry, with competitors offering multi-year price locks and aggressive pricing [14] - Demand for higher broadband speeds remains strong, with 82% of residential broadband customers taking 100 megabits or higher and 24% taking one gig or higher at the end of the quarter [42] Company Strategy and Development Direction - The company is focused on completing the proposed transaction with T-Mobile, which is expected to close in mid-2025, and is preparing for a smooth transition [9][16] - A special dividend to shareholders is anticipated following the closing of the T-Mobile transaction, with proceeds expected to be used to repay outstanding bank debt [10][18] - The fiber program has expanded the company's footprint by over 30% in the last three years, with further growth opportunities identified [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased uncertainties in the broader economy and markets but remains optimistic about the long-term potential of the tower business and fiber expansion [7][12] - The company is focused on cost optimization and expects capital expenditures to decline in 2025 as planned 5G coverage builds are largely completed [13][46] - Management expressed confidence in achieving $100 million in annual cost savings by the end of 2028 through transformation efforts [35][72] Other Important Information - The company does not plan to redeem Series UU and Series BV preferred stock, viewing them as foundational capital for future operations [10][68] - The expected cash income tax obligations related to the T-Mobile transaction are estimated to be between $225 million and $325 million [28][30] Q&A Session Summary Question: Timeline for designated entity spectrum approval - The timing is uncertain and dependent on regulatory approval by the FCC, but there is optimism for a positive outcome [52][54] Question: Free cash flow run rate - The $79 million in free cash flow is not necessarily a run rate, but capital expenditures are expected to be down in 2025, which is positive for free cash flow [55] Question: Debt exchange offer impact - The debt exchange offer will be launched about 50 days before the anticipated close, and the amount of debt exchanged will impact transaction proceeds [56][110] Question: Fiber net adds and sales efforts - Fiber net additions were lower due to timing of address delivery, but management expects improvements as construction activity ramps up [60][62] Question: Divestiture strategy and criteria - The company is focused on divesting non-core assets, particularly isolated copper markets without an economic path to fiber, ensuring that net proceeds exceed the present value of cash flows from continued operations [95][96]

Core Viewpoint - Comcast's Q1 2025 earnings report revealed a higher-than-expected broadband subscriber loss, impacting stock performance despite some revenue and EBITDA growth [1][2]. Financial Performance - Revenue for Q1 2025 was $29.9 billion, a decrease of 0.6% year-over-year, but approximately $100 million above consensus estimates [3]. - Adjusted EBITDA rose to $9.5 billion, reflecting a 1.9% year-over-year increase and about $400 million above estimates [3]. - Adjusted EPS increased by 4.8% year-over-year to $1.09, exceeding estimates by $0.10 [3]. Subscriber Trends - Broadband subscribers decreased by 199,000 quarter-over-quarter to 31.643 million, worse than the consensus estimate of a 146,000 loss [3]. - Video subscribers fell by 427,000 to 12.1 million, exceeding the consensus loss by 11,000 [4]. - Wireless subscribers increased by 323,000, bringing the total to 8.15 million, which was 27,000 above estimates [4]. Strategic Initiatives - Comcast introduced a new 5-year fixed-cost pricing plan starting at $55/month, which includes unlimited data, Wi-Fi, and a free mobile service line for one year [3][4]. - The company anticipates that the new pricing plan will require investment, potentially impacting EBITDA growth [4]. Market and Competitive Landscape - The advertising market remained flat, excluding political and sports influences, with no immediate macroeconomic impacts observed [2]. - Competitive intensity has increased, contributing to subscriber losses and necessitating a strategic transition in pricing [2]. Future Developments - Comcast is planning new attractions, including a Universal Theme Park and Resort in Bedford, England, set to open in 2031, with construction starting in 2026 [6]. - The company reported strong demand for the upcoming Epic Universe, with pre-opening costs of $100 million as previously guided [5].