Adjusted profit for Verizon Communications, Inc. (NYSE: VZ – $46.02) edged in above Wall Street expectations by a penny for the fourth quarter, as the company benefited from growth in smartphones and tablets during what is typically a competitive quarter. In the latest period, Verizon said it added 1.5 million net retail postpaid wireless subscribers, matching forecasts from analysts. But the growth represented a 24% decline from the 1.99 million it added in the prior-year period. The company added a net 449,000 phones in the quarter, as a decline in basic phones partially offset 713,000 net smartphone additions. Tablets continued to fuel much of Verizon’s subscriber growth in the quarter, representing 960,000 net additions. Meanwhile, VZ also logged net subscriber growth for both its Fios video and broadband offerings, though at levels less than both in the third quarter and a year earlier. Postpaid churns, or the rate at which customers canceled service, fell to 0.96% from 1.14% a year earlier. In all, Verizon reported an adjusted profit, or $0.89 share, compared with an adjusted $0.71, a year earlier. Revenue grew 3.2% to $34.25 billion, a bit higher than Street views of $34.1 billion. The company, however, reaffirmed its warning that earnings may plateau in 2016 as it works through changes it has made to keep its wireless plans in line with competitors.
This blue chip equity’s appreciation potential out to late decade is well above that of the average equity given its low valuation and long-term growth prospects. Acquisitions of AOL and Millennial Media add capabilities that significantly bolster Verizon’s strategy with strong cross-platform consumer and advertising offerings, particularly in mobile and video. What’s more, income-seeking types are likely to find VZ’s dividend yield of 5.1% rather appealing, as it is currently more than twice that of most stocks.