U.S. wireless carrier Verizon VZ released its first-quarter results before the opening bell on April 21. The telecommunications giant reported better-than-expected earnings and revenue, courtesy of robust growth in wireless and Verizon media.
The company's shares barely moved, up 0.1% in premarket trading to $58.30 following the earnings release.
By the numbers
The New York-based company recorded earnings per share of $1.31, which beat the $1.26 reported in the year-ago period. Operating revenue stood at $32.9 billion, up 4% year over year. Analysts had projected earnings of $1.29 per share on $32 billion in revenue.
The revenue growth was primarily due to solid recovery in wireless equipment revenue coupled with robust Verizon media performance. A fall in demand for legacy wireline products only partially negated the metric.
Reflecting on the latest quarter, Chairman and CEO Hans Vestberg said:
"Verizon is off to an excellent start in 2021 as we met the challenge of intense competition in the first quarter by achieving revenue growth across our three business segments. This year began with a transformative milestone for our company with our success in the recent C-Band spectrum auction. We continue to strengthen our networks, execute on our Network-as-a-Service strategy and focus on the five vectors that underpin our growth framework and position us to deliver success in 2021 and beyond."
Performance of business divisions
Revenue in the consumer business amounted to $22.8 billion, which reflected a 4.7% growth from the prior-year quarter. Verizon recorded 326,000 wireless retail postpaid net losses. Service revenue was up 1.4% to $16.6 billion courtesy of a shift to high-priced plans and a rise in connections per count. The quarterly retail postpaid churn rate was 0.97%, while the retail postpaid phone churn was 0.77%. The company added a net of 98,000 Fios internet connections as more people did work from home. Operating income in the segment amounted to $7.5 billion, up 3.3% on a year-over-year basis.
In the business segment, the company posted revenue of $7.8 billion, up 1.3% from the prior-year quarter. The decline in demand for legacy products was more than offset by robust growth of VPN services as well as high-quality mobility products. The retail postpaid churn rate was 1.24%. Wireless retail postpaid net additions totalled 156,000. The company further broke down the numbers into 47,000 phone net additions, 79,000 tablet net additions and 30,000 other connected device additions. Segment operating income came in at $899 million, which reflected a 5.8% growth year-over-year.
Outlook
The commercial launch of the 5G Ultra Wideband network across more markets in the U.S. is expected to boost Verizon's overall results in the upcoming quarters, given that the company has one of the most productive wireless networks in the United States.
For full-year 2021, the company anticipates adjusted earnings per share to lie in the range of $5 to $5.15. The company did not provide consolidated revenue guidance. However, the company did mention that its service and other revenue is expected to rise by at least 2%. Capital spending is projected to be around $17.5 billion to $18.5 billion.
Disclosure: I do not hold any positions in the stocks mentioned.
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