Why Verizon Earnings Fell Short
Verizon Communications reported disappointing fourth-quarter financial results before the markets opened on Tuesday.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
[cnxvideo id=”507732″ placement=”ros”]Verizon Communications Inc. (NYSE: VZ) reported its fourth-quarter financial results before the markets opened on Tuesday. The company posted $0.86 in earnings per share (EPS) on $32.34 billion in revenue. The consensus estimates from Thomson Reuters called for EPS of $0.89 and $32.08 in revenue. The same period of last year reportedly had $0.89 in EPS and revenue of $34.25 billion.
During the fourth quarter, Verizon reported 591,000 retail postpaid net additions. At year-end 2016, Verizon had 114.2 million retail connections, a 1.9% year-over-year increase. Verizon’s retail postpaid connections base grew 2.1% to 108.8 million, and retail prepaid connections totaled 5.4 million.
As for the Wireline segment, the company added a net of 68,000 Fios Internet connections and 21,000 Fios Video connections. Customer demand for Custom TV continues to remain strong. At year-end, Verizon had 5.7 million Fios Internet connections and 4.7 million Fios Video connections.
[nativounit]
In terms of guidance, the company expects to see 2017 consolidated revenues on an organic basis to be fairly consistent with 2016, as well as full-year 2017 EPS trends to be similar to consolidated revenue trends. The consensus estimates are $4.01 in EPS and $126.3 billion in revenue for 2017.
Also looking ahead, Verizon expects its acquisition of XO Communications to close in first-quarter 2017 and its sale of data centers to Equinix to close in second-quarter 2017. Regarding the Yahoo acquisition, Verizon continues to work with Yahoo to assess the impact of data breaches.
Lowell McAdam, chairman and CEO of Verizon, commented:
We are positioning Verizon for future growth and continued sustainable shareholder value. In the fourth quarter we expanded our customer base in highly competitive wireless and broadband markets. This capped a year in which we delivered solid results and returned value to shareholders, including $9.3 billion in dividends. We enter 2017 with confidence, based on our investments in next-generation networks and the new capabilities we have acquired. Our goal is to continue to earn our customers’ loyalty every day in a rapidly expanding mobile-first digital world.
On the books, Verizon’s cash, cash equivalents and short-term investments totaled $2.88 billion at the end of the quarter, versus $4.82 billion at the end of the same period of last year.
Shares of Verizon closed Monday at $52.41, with a consensus analyst price target of $53.68 and a 52-week trading range of $46.01 to $56.95. Following the release of the earnings report, the stock was down nearly 3% at $50.93 in early trading indications Tuesday.
[wallst_email_signup]
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
