Verizon Communications Inc. (NYSE: VZ) reported third-quarter 2020 results before markets opened Wednesday. The telecom giant posted adjusted diluted earnings per share (EPS) of $1.25 on revenue of $31.5 billion. In the same period a year ago, the company said it had EPS of $1.25 on revenue of $32.9 billion. Analysts were looking for EPS of $1.22 and revenue of $31.6 billion this time.
Verizon estimated that the COVID-19 pandemic reduced adjusted EPS by about five cents. Revenue fell by 4.1% year over year due to lower customer activity and timing of device launches.
In its consumer segment, the company added 142,000 net retail postpaid phone customers in the quarter and the postpaid phone churn rate rose sequentially from 0.51% to 0.63%. Segment revenue slipped by 4.3% year over year and increased by 2.8% sequentially to $21.7 billion.
In the company’s business segment, net wireless retail postpaid additions rose 1.2% year over year and 49% sequentially to 417,000. Postpaid churn rate rose from 0.90% to 0.96% sequentially. Revenue decreased by 1.7% year over year and rose 2.7% sequentially to $7.7 billion.
Verizon’s media group posted a sequential revenue increase of 21% to $1.7 billion. Monthly active users in the Yahoo finance and news business rose by 22% and 13%, respectively.
Verizon Chair and CEO Hans Vestberg commented: “We are energized by the transformational technology that our 5G Ultra Wideband and 5G nationwide bring. Our purpose-driven culture paired with our network leadership will shape the future, for the better.”
For the 2020 fiscal year, Verizon raised the bottom end of its adjusted EPS growth from negative 2% to flat. The top-end remained at growth of 2%. Capex guidance was narrowed to the “upper end” of the projected range of $17.5 billion to $18.5 billion.
Consensus estimates for the fourth quarter call for EPS of $1.12 and revenue of $34.4 billion. For the full year, analysts are expecting EPS of $4.77 and revenue totaling $128 billion.
New iPhones and an expanding 5G network (in 2021) will drive Verizon’s fourth-quarter results, depending on how consumers feel about spending in what is likely to be a period when COVID-19 infections rise.
Shares traded up about 0.7% at $57.64 early Wednesday. The stock’s 52-week range is $48.84 to $62.22, and the consensus 12-month price target is $61.26. Verizon’s dividend yield is 4.38% on an annual payment of $2.51 per share.