TDS reports a miss

Telephone and Data Systems (TDS) and its wireless subsidiary, U.S. Cellular, held a conference call this morning covering earnings for the second quarter 2001.

For the quarter ending June 30, the company posted diluted earnings, excluding one-time items, of 80 cents per share, missing consensus analyst estimates of 83 cents per share taken from First Call/Thompson Financial.

Operating revenues for the quarter were $642.3 million, up 9.7% year over year. Of that, $475.3 million was contributed by U.S. Cellular, with the balance coming from TDS Telecom, the company’s wireline business. Net loss for the quarter was just shy of $34 million, largely due to the one time charge of $385.2 million because of a loss the company took on its investment in VoiceStream Wireless upon conversion of that interest into shares of Deutsche Telekom.

Citing a weakening economy and pricing pressures from one major competitor, U.S. Cellular missed its net customer addition goal for the quarter. Tim Meyers, chief financial officer at the company, is cautious about U.S. Cellular meeting its customer addition goal of 450 million to 460 million for the year.

“That is still doable depending on how the economy holds up, though I would certainly favor the lower end of the range,” he said. In addition, “our targets for cash growth for the year of $465 million to $475 million are also still achievable. However, this too could be affected by how the economy impacts customer growth over the next quarter…Lower in the range is likely more prudent.”