Will Telephone & Data Systems (TDS) Miss on Earnings Again? - Analyst Blog


Telephone & Data Systems Inc. ( TDS ) is slated to report its first-quarter 2014 results on May 2, before the market opens. The company, which owns the majority of U.S. Cellular, has failed to beat the Zacks Consensus Estimate in the past four quarters.

Earnings Whispers

Our proven model does not conclusively show that TDS is likely to beat earnings because it does not have the right combination of two key ingredients of a positive surprise prediction and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Zacks ESP: Earnings ESP which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at 0.00% for TDS.

Zacks Rank: TDS currently has a Zacks Rank #3. However, the combination of TDS's Zacks Rank #3 and +0.00% ESP makes surprise prediction difficult.

Factors Influencing Results This Quarter

Within the wireless the company has been facing higher churn, particularly in the post-paid segment owing to an intensely competitive environment. Further, the company remains vulnerable to aggressive pricing by larger rivals as these have greater financial, technical, marketing and distribution resources. Higher smartphone subsidies continue to affect its margins.

The company's wireline segment also faces stiff competition from incumbent local exchange carriers and continues to experience reduction in access line customers due to wireless substitution and other alternative services. The carrier's high margin roaming business also remains challenged owing to lower voice usage and weak voice and data ARPU. We thus caution investors against the stock going into the earnings announcement.

Other Stocks to Consider

Here are some other companies to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Level 3 Communications Inc. ( LVLT ) with earnings ESP of +10.71% and Zacks Rank #1.

BCE Inc. ( BCE ) with earnings ESP of +1.47% and Zacks Rank #3.

America Movil S.A.B de CV Inc. ( AMX ) with earnings ESP of +31.71% and Zacks Rank #3.

AMER MOVIL-ADR (AMX): Free Stock Analysis Report

BCE INC (BCE): Free Stock Analysis Report

LEVEL 3 COMM (LVLT): Free Stock Analysis Report

TELEPHONE &DATA (TDS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AMX , BCE , LVLT , TDS



More from Zacks.com:

Related Videos



Most Active by Volume

    $92.37 unch
  • $40.83 ▼ 2.98%
  • $5.37 ▼ 0.74%
  • $17.03 ▼ 0.06%
  • $40 ▼ 3.73%
  • $47.0901 ▲ 0.88%
  • $101.88 ▲ 0.09%
  • $3.595 ▼ 1.10%
As of 9/19/2014, 02:42 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com