Verizon Touts “Strong Results” with Third Quarter 2017 Earnings

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Building on momentum from second-quarter 2017, Verizon Communications Inc. (NYSE, Nasdaq: VZ)  declared they delivered strong results in third-quarter 2017 citing both adding and retaining wireless customers, and generating significant cash flow.

Verizon expects capital spending for 2017 to be at the lower end of the range of $16.8 billion to $17.5 billion.

Q3 2017 highlights

  • 89 cents in earnings per share (EPS), no change from Q3 2016; adjusted EPS (non-GAAP), excluding special items, of 98 cents in Q3 2017, compared with $1.01 in Q3 2016.
  • Wireless: 603,000 retail postpaid net additions, including 486,000 postpaid smartphone net adds; retail postpaid churn of 0.97 percent, with strong customer loyalty demonstrated by retail postpaid phone churn of 0.75 percent — less than 0.90 percent for the 10th consecutive quarter.
  • Wireline: Fios total revenue growth of 4.8 percent.

Barclays market analyst Amir Rozwadowski said Verizon’s Q3 results were largely in line with and “slightly better than our expectations.”

“Management continued to deliver on recent phone net add momentum, churn and upgrade levels were low, and easing year-over-year wireless service revenue declines provide further credibility to the company’s mid-term outlook,” Rozwadowski said.  

“The company delivered better than expected wireless EBITDA, with wireless service margins ~240 bps above our estimates.  However, pressure on wireline margins resulted in consolidated EBITDA margins ~45 bps below our estimate.  In line with recent industry trends, FiOs Broadband net adds outperformed our expectations by 31k while net FioS video losses of -18k were steeper than our -10k estimate.  The latter likely reflects elevated industry pressures recently echoed by AT&T’s recent shortfall in traditional video subscribers.”

October 20, 2017

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