Conservative choice Verizon Communications, Inc. (NYSE: VZ – $49.53) reported third-quarter adjusted earnings of $0.98 a share, in line with estimates, but three cents shy of the year-ago figure, on a 2.5% top-line improvement. The company’s wireless segment posted a 2.4% drop in revenues, which may be attributed to more customers continuing to choose unsubsidized device payment plans, decreased overage revenues, lower postpaid customers and continued promotional activity. Wireless reported a net increase of 603,000 retail postpaid connections in the quarter, with much of the good news attributable to the recent launch of Verizon Unlimited. As a result, Verizon’s total number of retail postpaid connections now stands at 109.7 million. The percentage of phone activations on device payment plans was about 77% in the current period, on par with the second quarter figure. Management expects this metric to remain constant during the current quarter of this year. Separately, total revenues for the wireline division’s FiOS fiber-optic-based services were up 4.8% year-over-year, thanks to solid demand in both consumer and business markets.
Over the past six months, Verizon closed on the $4.48 billion purchase of Yahoo! on June 13th, and penned fiber purchase agreements with Corning and Prysmian to extend its network lead and position it to deliver new multiuse fiber services, including 5G, while complementing small-cell deployment. Verizon is on track to report 2017 earnings of about $3.76 a share, with a consensus estimate of $3.83 in the works for next year. This blue-chip stock remains a good choice for conservative portfolios, thanks to its impressive 4.85% dividend yield, 13 times next year’s earning’s valuation and attractive capital-appreciation potential through the early years of the coming decade.