Verizon Communications Inc. (NYSE: VZ – $49.75) reported first-quarter results highlighted by strong revenue growth and continued Verizon Wireless customer loyalty. On an adjusted basis, earnings per share was $1.17, compared with $0.95 in first-quarter 2017. Street estimates were $1.10. Total operating revenues were $31.8 billion, up 6.6% from last year and also better than consensus views. The primary driver was solid performance in the wireless business with improved service revenue results. Adjusted wireless revenues were $21.9 billion, an increase of 4.7% compared with 2017, with a net increase of 260,000 retail postpaid connections. The company added a net of 66,000 FIOS Internet connections and lost 22,000 FIOS Video connections, indicative of the continued cord-cutting trend regarding traditional linear video bundles. Cash flow from operations totaled $6.6 billion up $5.3 billion year-over-year and total capital expenditures were $4.6 billion.
Management guided full-year revenue growth at low single-digit percentage rates and expects service revenue growth to turn positive by the end of 2018. Verizon also guided low single-digit percentage growth in adjusted earnings and the Street is looking for a full-year $4.50 figure vs. $3.76 in 2017. Capital spending for 2018 will be in the range of $17 billion to $17.8 billion, including the commercial launch of 5G. Conservative investors with an eye toward the early years of the coming decade may want to take a look here. Given the impact of the recent tax reform, Verozon stock offers alluring capital-appreciation potential over that time frame and the $2.36 annual dividend, yielding 4.9%, adds to its appeal.