TDS 4Q Profit Up 24%, US Cellular Net Edges Up But Co Loses Subscribers

Telephone & Data Systems Inc.'s (TDS) fourth-quarter profit rose 24% as its U.S. Cellular Corp.'s (USM) profit edged higher even as the carrier again lost subscribers.

U.S. Cellular has been losing postpaid subscribers amid increasing competition in a wireless industry nearly saturated with cellphones. Big carriers have continued to add subscribers on the strength of marquee handsets.

TDS reported a profit of $14.5 million, or 14 cents a share, up from $11.7 million, or 11 cents a share, a year earlier. Revenue edged up 0.3% to $1.27 billion.

Analysts polled by Thomson Reuters most recently expected earnings of 22 cents on $1.28 billion in revenue.

TDS's Madison, Wis.-based telecommunications business, TDS Telecom, saw revenue rise 0.5% and profit fall 3.8%. Companywide, physical access lines fell 5.3% from a year earlier and 1.8% from the prior quarter.

Meanwhile, U.S. Cellular posted a profit of $6.8 million, up from $6.6 million a year earlier. Per-share earnings were flat at 8 cents. Revenue edged up 0.3% to $1.06 billion.

Analysts most recently predicted earnings of 22 cents on $1.07 billion in revenue.

The carrier, which operates in 26 states, said it lost a net 31,000 customers during the period, compared with prior-year gains of 10,000. It ended 2010 with about 6.1 million customers, 1.1% lower than a year earlier.

Retail average revenue per user rose to $47.41 from $47.07 and retail postpaid churn--or turnover rate--improved to 1.5% from 1.6%.

Shares of TDS and U.S. Cellular closed Wednesday at $32.65 and $46.71, respectively, and both were inactive premarket.

-By Matt Jarzemsky and Nathan Becker, Dow Jones Newswires; 212-416-2240; [e-mail]