Telecom & Wireless

What to Expect From Verizon Q1 Earnings

Chris Lange

Published: April 20, 2016 1:10 pm

Last Updated: January 13, 2020 10:32 am

Verizon Communications Inc. (NYSE: VZ) is set to report its first-quarter financial results before the markets open on Thursday. The consensus estimates from Thomson Reuters are $1.06 in earnings per share (EPS) on $32.39 billion in revenue. In the same period of last year, it posted EPS of $1.02 and $31.98 in revenue.

This top telecommunications company is rated Buy at Merrill Lynch. 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 the Frontier Communications acquisition of Verizon’s wireline operations in California, Florida and Texas. 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 reported solid fourth-quarter numbers with earnings slightly higher than some Wall Street estimates and revenues above the street consensus as well.

There was some chatter recently that the company was enlisting the aid of the firm’s AOL CEO, Tim Armstrong, to help in exploring a possible bid for Yahoo assets. Verizon has not officially started negotiations, and the rumors are just that, but the company has said in the past it was open to acquiring additional assets. The Yahoo book is out, and numerous companies are pouring over it now.

Ahead of the earnings report, a few analysts weighed in on the stock:

• Morgan Stanley reiterated a Buy rating.
• Scotiabank downgraded it to Sector Perform from Outperform.
• Barclays has an Equal Weight rating with a $52 price target.
• Argus reiterated a Buy rating.
• Sanford Bernstein downgraded it to Market Perform from Outperform with a $55 price target.
• Jefferies has a Hold rating with a $53 price target.

So far in 2016, Verizon has outperformed the market, with the stock up 15%. Over the past 52 weeks, the stock is up over 10%.

Shares of Verizon were trading at $52.00 on Wednesday, with a consensus analyst price target of $52.07 and a 52-week trading range of $38.06 to $54.49.