Telecom company Verizon Communications Inc. (VZ, Financial) reported its third-quarter results before the opening bell on Oct. 19.
The New York-based company posted adjusted earnings per share of 98 cents, meeting estimates. Quarterly revenue of $31.72 billion beat expectations of $31.45 billion and increased 2.5% from $30.94 billion in the prior-year quarter.
In addition, the company added 603,000 net retail postpaid phone subscriber additions, or 486,000 smartphones, during the quarter, exceeding the expected 438,000 additions.
Following the announcement, shares swelled more than 2% in premarket trading.
The trend in Verizon’s revenue growth over the past decade is illustrated in the graph below.
The company’s earnings were slightly impacted by Hurricanes Harvey and Irma. While it does not operate in Puerto Rico, the company has assisted in recovery efforts from Hurricane Maria. Chairman and CEO Lowell McAdam commented on the recent storms.
“I share the pride of all Verizon employees that our network aided and served first responders and customers when they needed it most following the recent natural disasters,” he said.
Operating revenue from wireless services, a key metric for this sector, declined 5.1% from a year ago to $15.8 billion. Declines in service revenue, though, improved for the first time in 12 quarters. The company posted a decline of 5.1% in service as compared to a 6.7% decrease in the second quarter. The company expects the service revenue to continue increasing and end the year with a year-over-year decline of less than 4%.
In its wireline business, Verizon recorded a revenue increase of 1.1% to $7.7 billion. While the Fios business added 66,000 internet connections, it lost a net of 18,000 video connections, which reflects the shift in consumer preferences from traditional platforms to online services. For the quarter, it recorded 4.6 million total video subscribers.
Its media business Oath, which includes AOL and Yahoo, generated $2 million in revenue. The company said the integration of the two entities is ahead of schedule.
For the full year, Verizon expects consolidated revenues and adjusted EPS to be consistent with 2016 due to improvements in the wireless service and equipment revenue trends. The company anticipates consolidated capital spending for the year to be at the lower end of the $16.8 billion to $17.5 billion range. The effective tax rate is projected to be around 34%.
Among the 23 gurus invested in Verizon, Barrow, Hanley, Mewhinney & Strauss has the largest position with 0.69% of outstanding shares. Other top guru shareholders include the T Rowe Price Equity Income Fund (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), John Rogers (Trades, Portfolio) and Tweedy Browne (Trades, Portfolio).
With a market cap of $202.18 billion, Verizon was trading around $49.56 on Thursday. According to GuruFocus data, the stock has lost 9% year to date.
Disclosure: I do not own any stocks mentioned.