Telephone and Data Systems (TDS) to Divest Assets for Core Focus
Telephone and Data Systems, Inc. TDS recently announced that it has inked an agreement with Poka Lambro Telecommunications, Ltd. and Nevill Holdings, Inc. to sell its cable operations in Texas. The transaction, expected to close in the fourth quarter of 2024, represents a strategic shift for TDS as it focuses on its core markets and aims to enhance profitability.
Under the terms of the joint agreement, cable properties of TDS in Seminole, Seagraves and Denver City will be transferred to Poka Lambro, while Nevill Holdings will acquire the cable properties in Alpine and Fort Stockton.
Founded in 1950, Poka Lambro has evolved from serving rural areas with telephone services to becoming a leading provider of fiber-to-the-premise facilities across 4,000 square miles in the south plains of Texas. Known for its advanced telecommunication services, the company is well-equipped to integrate the new communities into its network and continue delivering excellent service.
Meanwhile, Nevill Holdings, through its subsidiaries Big Bend Telephone Company and Big Bend Telecom Ltd., has been connecting and serving rural West Texas for more than 60 years. It offers high-speed fiber Internet, voice services and data center solutions, aiming to bridge the digital divide and enhance digital accessibility in rural areas. This acquisition will likely help the company strengthen its connectivity and continue its tradition of quality service across West Texas.
From an industry perspective, the deal represents a significant consolidation within the telecom industry, where companies are reshaping their portfolios and strategies to adapt to changing market conditions and technological advancements. The transaction is expected to enhance TDS’ service offerings with a core focus and provide greater technical capabilities to customers. This will likely strengthen TDS’ reputation as a leader in the telecom industry and improve its revenues in the upcoming quarters.
Shares of TDS have gained 16.9% over the past year against the industry’s decline of 0.6%.
Image Source: Zacks Investment Research
Zacks Rank and Key Picks
TDS currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader industry have been discussed below.
Arista Networks, Inc. ANET, sporting a Zacks Rank of 1 (Strong Buy), supplies products to a prestigious set of customers, including Fortune 500 global companies in markets such as cloud titans, enterprises, financials and specialty cloud service providers. You can see the complete list of today’s Zacks #1 Rank stocks here.
It delivered a trailing four-quarter average earnings surprise of 15.02%. In the last reported quarter, Arista delivered an earnings surprise of 8.25%.
CommScope Holding Company, Inc. COMM is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. It has a long-term growth expectation of 24.93%.
CommScope currently holds a Zacks Rank of 2 (Buy).
Harmonic Inc. HLIT enables media companies and service providers to deliver ultra-high-quality broadcast and OTT video services to consumers globally. It delivered a trailing four-quarter average earnings surprise of 32.5%. It currently sports a Zacks Rank of 1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Harmonic Inc. (HLIT) : Free Stock Analysis Report
Telephone and Data Systems, Inc. (TDS) : Free Stock Analysis Report
CommScope Holding Company, Inc. (COMM) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report