Telephone & Data Systems Earnings Preview

Watch Telephone & Data Systems' (NYSE: TDS) earnings report to see if it can beat analyst expectations for the third consecutive quarter. The company will unveil its latest earnings on Monday. Telephone & 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 & Data Systems with three of five analysts rating it hold. Analysts don't like Telephone & Data Systems as much as competitor NTELOS Holdings overall. Six out of seven analysts rate NTELOS Holdings a buy compared to one of five for Telephone & Data Systems. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
• Revenue forecasts: On average, analysts predict $1.31 billion in revenue this quarter. That would represent a rise of 3.1% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.29 per share. Estimates range from $0.17 to $0.41.

What our community says:
CAPS All-Stars are solidly supporting the stock, with 85.7% awarding it an outperform rating. The community at large is in line with the All-Stars, with 82.9% granting it a rating of outperform. Fools feel positively about Telephone & Data Systems, though the message boards have been quiet lately with only 47 posts in the past 30 days. Telephone & Data Systems' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Telephone & Data Systems' profit has risen year-over-year by an average of 43.6% 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 serve as an illustration of how efficiently a company captures portions of sales dollars. The company's gross margins have been decreasing year-over-year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. Here is how Telephone & Data Systems has been doing for the last four quarters:

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Earnings estimates provided by Zacks.