DOW JONES NEWSWIRES
Telephone & Data Systems Inc.'s (TDS) second-quarter
earnings more than doubled amid an 81% leap in profit at its U.S.
Cellular Corp.(USM), though the carrier continued to struggle with
subscriber losses.
U.S. Cellular--which accounts for the bulk of TDS' revenue--has
steadily been losing postpaid subscribers amid rising competition
in a wireless industry nearly saturated with cellphones. Large
carriers have continued to add customers on the strength of marquee
handsets.
TDS reported a profit of $91.1 million, up from $40.3 million a
year earlier. On a per-share basis, which reflects payment of
preferred dividends, earnings rose to 87 cents from 38 cents a year
ago. Revenue improved 3.8% to $1.28 billion.
Analysts polled by Thomson Reuters expected per-share earnings
of 35 cents a share on $1.27 billion in revenue.
Separately Monday, TDS announced a proposal to reclassify its
outstanding special common shares into common shares on a
one-for-one basis, while retaining the controlling shareholder
vote, a move the company said it sought to simplify its capital
structure.
Meanwhile, U.S. Cellular posted a profit of $73.9 million, or 87
cents a share, up from $40.8 million, or 47 cents a share, a year
earlier. Revenue improved 4.5% to $1.08 billion.
Wall Street expected per-share earnings of 40 cents a share on
$1.07 billion in revenue.
"We continued to increase postpaid ARPU and maintain a low churn
rate," said U.S. Cellular Chief Executive Mary N. Dillon, adding
that subscriber results remained the company's greatest
challenge.
The carrier said it lost a net 70,000 customers during the
period, compared with a loss of 3,000 a year earlier. It ended the
period with about 6 million customers, down 2.9% from a year
earlier.
TDS shares closed Friday at $25.47 while U.S. Cellular finished
at $39.70. Shares were inactive premarket.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207;
mia.lamar@dowjones.com