Telecom & Wireless

What to Look For in Verizon's Q3 Report

Verizon Communications Inc. (NYSE: VZ) is scheduled to release its third-quarter financial results before the markets open on Tuesday. The consensus estimates call for $1.19 per share in earnings and $32.51 billion in revenue. The same period of last year reportedly had $0.98 per share and $31.72 billion, respectively.

In the past month, Verizon announced that it was raising its dividend for the 12th consecutive year. The prior quarterly dividend of $0.59 per common share will jump to $0.6025. This will create a dividend yield of 4.47% for any new investor getting in at the current share price of $53.89.

Verizon further said that it has roughly 4.1 billion shares of common stock outstanding and that it had made $4.8 billion in cash dividend payments during the first half of 2018. This new dividend hike to $2.41 on an annualized basis will create a dividend liability of $9.88 billion.

Also, Verizon recently confirmed that it offered 44,000 employees voluntary severance packages last month. That’s nearly a quarter of the company’s total workforce.

The Wall Street Journal first reported the offer late in September and received confirmation from Verizon of the action in early October. The severance offer is part of Verizon’s $10 billion cost-cutting effort that is aimed at positioning the company for what is certain to the expensive rollout of 5G network technology over the next several years.

In the past 52 weeks, Verizon has outperformed the broad markets, with its shares up about 13%. In just 2018 alone though, the stock is up only 4%.

A few other weighed in on Verizon ahead of the earnings report:

  • Merrill Lynch has a Buy rating with a $58 price target.
  • Moffett Nathanson has a Neutral rating and a $56 price target.
  • Barclays has an Equal Weight rating and a $50 price target.
  • Scotiabank has a buy rating with a $61 price target.

Shares of Verizon were last seen at $54.97, with a consensus analyst price target of $56.71 and a 52-week trading range of $43.97 to $55.90.