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Revenue: Reported value for the first quarter of 2024 was $1,262 million, down from $1,303 million a year ago and above expectations of $1,255.79 million.
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Net income: It grossed $12 million, significantly exceeding the estimated $10 million.
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Earnings per share (EPS): The price was $0.10, higher than the expected -$0.05.
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US mobile phone segment: Although service revenue decreased by 2%, postpaid ARPU increased by 3% and net income showed significant improvement.
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TDS Telecom Segment: Delivered 28,000 fiber service addresses in the first quarter, with residential broadband connections increasing 6% and operating revenue increasing 5%.
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Strategic review: US Cellular continues to seek strategic alternatives to improve shareholder value.
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Guidance for 2024: Previous forecasts for both the US Cellular and TDS Telecom segments remain unchanged and have been reaffirmed.
On May 3, 2024, Telephone and Data Systems Inc (NYSE:TDS) disclosed its first quarter 2024 financial results through its 8-K filing. The diversified carrier, known for its US Cellular and TDS Telecom divisions, reported mixed financial results, with a notable increase in net income despite a slight decline in sales.
Financial overview
TDS' operating revenue for the first quarter of 2024 was $1,262 million, down from $1,303 million in the prior-year period. However, the company experienced a significant turnaround in profitability, with net income attributable to common shareholders of $12 million ($0.10 per share), compared to a loss of $9 million (-$0.08 per share) in the first quarter of 2023. increased to. These numbers are consistent. Analysts had expected earnings of -$0.05 per share and net income of $0.10 million.
Revenues of $1,262 million were slightly below estimates of $1,255.79 million, but reflect competitive pressures and operational challenges in the communications industry.
Segment performance and strategic initiatives
TDS' largest revenue generator, UScellular, experienced a 3% increase in average postpaid revenue per user (ARPU) and a significant 4% decline in postpaid churn, despite a decline in service revenue. reported a 2% decrease. In this segment, fixed wireless customers also increased by 42% and now total 124,000. Despite the loss of postpaid customers, ARPU improvements and cost optimization efforts resulted in increased profitability.
TDS Telecom showed strong growth, particularly in the residential broadband sector, with connections increasing by 6%. The segment delivered 28,000 new fiber service addresses in the quarter and is on track to meet its annual goal of 125,000. His 10% increase in residential revenue and significant increase in adjusted EBITDA confirms that the expansion and customer acquisition strategies in place are successful.
Exploring strategic alternatives for US Cellular
In a major strategic move, TDS and US Cellular are exploring a range of strategic alternatives for US Cellular to enhance shareholder value. The review is ongoing and reflects the company's proactive approach to navigating a competitive market environment.
Outlook and guidelines
TDS reaffirmed its full-year 2024 guidance for both US Cellular and TDS Telecom, expressing confidence in its strategic planning and operational alignment. The company expects US Cellular's service revenue and Adjusted EBITDA to remain unchanged and TDS Telecom's operating revenue and Adjusted EBITDA to remain stable.
conclusion
Telephone and Data Systems Inc's first quarter 2024 results reflect a resilient operating model that allows the company to weather industry challenges. TDS is positioning itself for sustainable growth with a strategic review and strong segment performance, particularly in broadband expansion. Investors and stakeholders will take comfort in the company's steady guidance and strategic initiatives towards long-term value creation.
For detailed financial metrics and information, please visit TDS's Investor Relations page or access the full earnings report via the link above.
For more information, see Telephone and Data Systems Inc's full 8-K earnings release here.
This article first appeared on GuruFocus.