Verizon Communications 3rd Quarter Results Top Street Forecasts
Voice and data service provider Verizon Communications, Inc. (NYSE: VZ – $49.13) posted stronger than expected third-quarter earnings and revenue on solid wireless growth. Excluding unusual items, Verizon earned $0.77 per share, compared with $0.64 last year and Wall Street expectations of $0.74. Revenue rose 4.4% to $30.28 billion from $29.01 billion in the third quarter of 2012. Analysts expected a top line of $30.16 billion. The 7.2% increase in wireless revenue for the quarter was offset by a slower 4.3% rise in wireline revenue. Wireless added 927,000 net retail subscribers in the quarter, compared with Wall Street expectations of about 1 million customers. While the company’s wireless customer growth numbers were slightly below Street estimates, it had good profit and revenue growth as subscribers spent more on data services. The shares are off their highs for the year since the Vodafone deal was announced and the potential for an overhang of shares once they are distributed to Vodafone stockholders. However, income seeking accounts may find interest in VZ at current levels as long-term total return is appealing given the 4.5% dividend yield, reasonable valuation and steady earnings growth.