Telephone and Data Systems’ first quarter was marked by a significant shortfall relative to Wall Street’s expectations, with revenue and profitability both trending lower. Management attributed quarterly performance to the impact of prior divestitures, ongoing customer losses in wireless, and competitive pricing pressure in the telecommunications market. CEO LT Therivel cited “continued pressure on service revenues” and highlighted that, despite operational improvements, aggressive industry promotions and subscriber attrition weighed on results. CFO Vicki Villacrez acknowledged that the company is working through substantial transition activities as it prepares for the proposed sale of UScellular’s wireless operations to T-Mobile, as well as ongoing cost reduction and transformation efforts.
Is now the time to buy TDS? Find out in our full research report (it’s free).
Telephone and Data Systems (TDS) Q1 CY2025 Highlights:
- Revenue: $1.15 billion vs analyst estimates of $1.18 billion (8.6% year-on-year decline, 2.1% miss)
- EPS (GAAP): -$0.09 vs analyst estimates of -$0.01 (significant miss)
- Adjusted EBITDA: $299 million vs analyst estimates of $347.5 million (25.9% margin, 14% miss)
- Operating Margin: 3.2%, down from 5.8% in the same quarter last year
- Market Capitalization: $4.03 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Telephone and Data Systems’s Q1 Earnings Call
- Ric Prentiss (Raymond James) asked about the timeline for regulatory approvals of designated entity spectrum assets. CFO Doug Chambers replied that while timing is uncertain, the company is optimistic approvals will occur, but has little control over the process.
- Sebastiano Pettiat (JPMorgan) questioned the rationale behind not redeeming preferred stock post-transaction. CFO Vicki Villacrez explained that the Series UU and BB preferred shares are viewed as foundational capital and part of an interim financing strategy, rather than being targeted for redemption.
- Sergey Dluzhevskiy (GAMCO Investors) asked about the growth outlook for the tower business and opportunities to increase colocation rates. CEO LT Therivel cited increased carrier demand and internalization of sales and marketing as drivers, but stressed ongoing need to streamline overhead for standalone operation post-close.
- Sebastiano Pettiat (JPMorgan) inquired about the ramp-up and phasing of the $100 million cost savings program at TDS Telecom. VP Kris Bothfeld stated that cost savings will be achieved gradually by 2028, with some offset from inflation and expansion costs, but did not provide a year-by-year breakdown.
- Ric Prentiss (Raymond James) asked whether the tower business will report metrics like AFFO (Adjusted Funds From Operations) after the transaction. CFO Doug Chambers confirmed plans to provide such reporting in the first full quarter post-close.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be tracking (1) updates on the timing and terms of the T-Mobile and related spectrum transactions, (2) execution of the fiber expansion program and improvements in broadband net additions, and (3) progress on cost transformation initiatives and resulting impacts on margins. Additional attention will be paid to new developments in the tower business and any further divestitures of non-core legacy network assets.
Telephone and Data Systems currently trades at $34.95, down from $37.60 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
Our Favorite Stocks Right Now
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
