Telecom & Wireless

What to Expect From Verizon Earnings

Chris Lange

Published: January 20, 2016 12:15 pm

Last Updated: January 13, 2020 2:48 pm

Verizon Communications Inc. (NYSE: VZ) is scheduled to report its fourth-quarter financial results before the markets open on Thursday. The consensus estimates from Thomson Reuters are $0.88 in earnings per share (EPS) on $34.06 billion in revenue. The same period from the previous year had $0.71 in EPS on $33.19 billion in revenue.

This top telecommunications company also resides on the Merrill Lynch US 1 list. Verizon is a global leader in delivering the digital world. Verizon Wireless operates America’s self-described most reliable wireless network, with 109.5 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.

Wall Street has applauded Frontier’s acquisition of Verizon’s wireline operations in California, Florida and Texas, which is expected to be completed at the end of March. Many feel that focusing on the higher margin segments at the company makes sense, and the sale to Frontier is a huge cash boost to the balance sheet.

Verizon could have a better 2016 than it did in 2015. If you include the 4.9% dividend yield in a total return calculation, analysts on Wall Street were looking for a 13.3% gain in 2016. That is after a total return of only 3.6% a year ago, but note that a year ago analysts actually were looking for Verizon to post a 17% total return.

Prior to the release of the earnings report, a few analysts weighed in on Verizon:

• BTIG Research downgraded it to a Neutral rating from Buy.
• JPMorgan reiterated an Outperform rating but lowered the price target to $55 from $57.
• Cowen reiterated a Market Perform rating with a $48 price target.
• Citigroup reiterated a Hold rating.

So far in 2016, Verizon has outperformed the market, with the stock only down 1.7% year to date. Over the past 52 weeks, not much has changed and the stock is only down 1.9%.

Shares of Verizon were trading down 1.7% at $44.11 on Wednesday, with a consensus analyst price target of $50.58 and a 52-week trading range of $38.06 to $50.86.