Does Verizon Deserve More Credit for Q2 Earnings?
Verizon Communications Inc. (NYSE: VZ) reported its most recent quarterly results before the markets opened on Thursday. The telecom giant posted $1.23 in earnings per share (EPS) and $32.1 billion in revenue, while consensus estimates had called for $1.20 in EPS and $32.41 billion in revenue. Last year’s second quarter reportedly had $1.20 in EPS and $32.2 billion in revenue.
Verizon Consumer revenues for the quarter were $22.0 billion, flat year over year, reflecting continued strong growth in wireless service revenue and Fios service offerings, offset by declines in wireless equipment and legacy wireline services. There were 126,000 retail postpaid net additions, including 73,000 phone net additions and 209,000 postpaid smartphone net additions.
Separately, Verizon Business revenues were $7.8 billion, down 1.1% year over year, as growth in wireless services and high-quality fiber products was offset by declines in legacy products. There were 325,000 retail postpaid net additions, including 172,000 phone net additions.
In terms of the Wireless and Wireline segment breakdown within the business and consumer segments Verizon reported the following:
- Wireless revenues grew 1% year over year to $22.7 billion, driven by a 3.1% increase in service revenue. The segment recorded 451,000 retail postpaid net additions, including 420,000 postpaid smartphone net additions, and 245,000 phone net additions, an increase from the 199,000 phone net additions in second-quarter 2018.
- Wireline revenues totaled $7.1 billion, with 34,000 Fios Internet net additions. Fios total revenue growth was 1.9% year over year.
Looking ahead to the full year, Verizon expects to see EPS growth in the low single-digit percentage range. Consensus estimates call for $4.75 in EPS and $131.81 billion in revenue for the year.
Hans Vestberg, board chair and chief executive, commented:
Verizon finished strong in the first half of 2019 by delivering solid financial results while transforming the business under the new operating structure and advancing our leadership in 5G. Verizon made history this quarter by becoming the first carrier in the world to launch 5G mobility. We are focused on optimizing our next-generation networks and enhancing the customer experience while we head into the second half of the year with great momentum.
Shares of Verizon traded up about 2% at $56.41 Thursday morning, in a 52-week range of $51.43 to $61.58. The consensus price target is $59.36.