Verizon (VZ, Financial) reported its second quarter earnings before the bell on Tuesday, July 26. The company’s earnings report missed revenue estimates, however, earnings were higher than expected. For the quarter, revenue was $30.53 billion, missing estimates by $420 million. Revenue for the quarter was down -5.2% from the comparable quarter. Earnings per share for the quarter were $0.94, beating estimates by $0.02. For the quarter, earnings per share were 10% lower than the comparable quarter.
Verizon’s two main business segments were down in the second quarter. Wireless revenue was down 4% from the comparable quarter. Operating income in wireless increased 4% from the comparable quarter to $8.0 billion. Wireline revenue was down 2% from the comparable quarter. Operating income in wireline was also lower, down $264 million from the comparable quarter.
On Monday, Verizon announced it would be entering into an agreement to buy Yahoo (YHOO, Financial) for approximately $4.8 billion. The deal is expected to close in the first quarter of 2017. Yahoo will complement Verizon’s AOL business. The majority of the new Yahoo business will contribute to revenue in wireless.
In Verizon’s second quarter earnings comments, Chief Executive Officer, Lowell McAdam reported the following about the acquisition, “By acquiring Yahoo, we are scaling up to be a major competitor in mobile media. Yahoo is a complementary business to AOL, giving us market-leading content brands and a valuable portfolio of online properties and mobile applications that attract over 1 billion monthly active consumer views. We expect this acquisition to put us in a great position as a top global mobile media company and give us a significant source of revenue growth for the future."
In recent reports, CNBC and Bloomberg gave insight on Verizon’s second quarter earnings and its Yahoo deal.
Disclosure: I do not own any shares of Verizon or Yahoo.
