Verizon Reports Mixed Results
Verizon Communications, Inc. (NYSE: VZ – $47.15) said it had net income equal to $1.04 a share in the second quarter, up from $1.01 a share in the year-earlier period and $0.03 ahead of Street estimates. Revenue rose 2.4% to $32.2 billion vs. $31.483 billion last year. The consensus was for revenue to be closer to $32.5 billion. Cash flow from operating activities increased to $18.9 billion in first-half 2015, compared with $14.8 billion in first-half 2014. Cash flow for the quarter included a non-recurring $2.4 billion related to the monetization of tower assets. Verizon Wireless had 1.1 million retail postpaid net additions in second-quarter 2015, nearly twice the net additions in first-quarter 2015. Verizon also added 72,000 net new FiOS Internet connections and 26,000 net new FiOS Video connections, representing year-over-year increases of 8.1% and 6.4%, respectively. Verizon completed the acquisition of AOL Inc. on June 23rd, to further drive the company’s expansion into digital media, including its mobile video strategy. Earlier this month, Verizon struck an agreement for an undisclosed amount with Vice Media to license food, travel and tech programming, the carrier’s latest content deal as it prepares for its upcoming mobile video service. Vice will supply content from its existing digital channels, as well as create new content exclusive to Verizon’s service. The company said that it is expecting full- year revenue growth of at least 3%. Consensus earnings estimates for the full-year are at $3.85, up from $3.38 for 2014 and $3.95 is the average estimate for 2016. The shares, yielding 4.6%, can be held in well-diversified conservative and income accounts.