Telephone and Data Systems Earnings Preview

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Investors never know what to expect for Telephone and Data Systems (NYS: TDS) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Friday. Telephone and Data Systems is a diversified telecommunications service company with wireless operations provided by United States Cellular and wireline operations provided by TDS Telecommunications.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Telephone and Data Systems with four of six analysts rating it hold. Analysts don't like Telephone and Data Systems as much as competitor NTELOS Holdings overall. Seven out of eight analysts rate NTELOS Holdings a buy compared to one of six for Telephone and Data Systems. Analysts' rating of Telephone and Data Systems has stayed constant from three months prior.
  • Revenue forecasts: On average, analysts predict $1.3 billion in revenue this quarter. That would represent a rise of 2.4% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.43 per share. Estimates range from $0.37 to $0.50.

What our community says:
CAPS All-Stars are solidly behind the stock with 89.5% awarding it an outperform rating. The community at large concurs with the All-Stars with 83.8% granting it a rating of outperform. Fools have embraced Telephone and Data Systems, though the message boards have been quiet lately with only 47 posts in the past 30 days. Telephone and Data Systems' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Telephone and Data Systems' profit has risen year over year by an average of 28.2% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

63%

61.3%

58.4%

61.5%

Operating Margin

9.8%

6.9%

1.5%

6.6%

Net Margin

7.1%

3.3%

1.1%

3.2%

One final thing: If you want to keep tabs on Telephone and Data Systems movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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