- Wednesday, October 16, 2024
United States Cellular (UScellular) shares soared by 36% to $23.74 in premarket trading after Telephone & Data Systems (TDS) and UScellular's boards of directors announced their intention to explore strategic alternatives for UScellular.
TDS, which holds approximately 83% of UScellular, has enlisted the services of Citi as its financial adviser, along with legal counsel, to assist with the evaluation process. Furthermore, UScellular's independent directors have also secured their own financial adviser and legal counsel.
In addition to this news, UScellular reported lower-than-expected second-quarter earnings. The wireless phone company's quarterly earnings amounted to $5 million, or 5 cents per share, compared to last year's earnings of $21 million, or 25 cents per share. Analysts polled by FactSet had anticipated earnings of $17 million, or 9 cents per share.
Meanwhile, TDS experienced lower revenue and incurred a loss in the second quarter, primarily due to its UScellular business. The telecommunications company reported a net loss of $19 million, or 17 cents per share, as opposed to a profit of $18 million, or 15 cents per share, during the same period last year. Analysts surveyed by FactSet had predicted a loss of 4 cents per share.
It remains to be seen how these developments will shape the future trajectory of both UScellular and TDS.
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