Verizon Communications Inc. (VZ, Financial) released its third-quarter earnings before the opening bell on Oct. 25. The telecommunications giant reported better-than-expected results owing to its robust wireless business.
By the numbers
The New York-based company recorded earnings of $1.25 per share, which exceeded the $1.19 per share reported in the year-ago period. Operating revenue came in at $32.9 billion. Analysts had projected earnings of $1.24 per share on $32.7 billion in revenue.
Revenue growth was led by solid performance in the wireless segment, which saw sales increase 2.6% to $23.6 billion. This was partially offset by a decline of 3.8% to $7.1 billion in the wireline segment.
Reflecting on the company's performance, Chairman and CEO Hans Vestberg said:
"Verizon continued its momentum in the third quarter by driving strong wireless volumes in both our Consumer and Business segments, while delivering solid financial results, highlighted by continued wireless service revenue growth, increased cash flow, and EPS growth."
Performance of consumer and business divisions
Revenue in the consumer business amounted to $22.7 billion, which reflected a 1.4% increase from the same quarter last year. Verizon recorded 193,0000 retail postpaid net additions. Service revenue swelled 1.5% to $16.4 billion courtesy of a shift to high-priced plans and a rise in connections per count. The quarterly retail postpaid churn rate rose from 1.01% in the year-ago period to 1.05%. The company added a net of 30,000 Fios internet connections.
In the business segment, the company recorded revenue of $7.9 billion, which remained flat from the prior-year quarter. The decline in demand for legacy wireline products more than offset robust growth of wireless service revenue as well as high-quality fibre products. The retail postpaid churn rate was 1.22%. Wireless retail postpaid net additions totalled 408,000, up 12.1%.
The 5G launch
The commercial launch of the 5G Ultra Wideband network across markets in the U.S. will boost Verizon’s overall result in the upcoming quarters. In 2019, the company will have increased its 5G network to 30 cities in the U.S.
Guidance
Verizon is projecting full-year 2019 adjusted earnings per share growth to be in the low single digits. GAAP revenue is estimated to grow by single digits as well due to positive impacts from tax savings and high cash flow from operations. Capital spending is projected to be around $17 billion to $18 billion.
Disclosure: I do not hold any positions in the stocks mentioned.
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