Conservative · Income · Stocks to Consider and Updates

Verizon Delivers Strong 3rd Quarter Results

Verizon Communications, Inc. (NYSE: VZ – $56.79) posted third-quarter results highlighted by continued growth at Verizon Wireless, strong cash flow and network innovations that led to the world’s first 5G commercial product offering. For the period, the company reported net income of $4.92 billion, up from $3.62 billion a year earlier and adjusted earnings of $1.22 per share compared with $0.98 in third-quarter 2017 and three cents better than analysts’ views. Revenue rose 2.8% to $32.6 billion and ahead of expectations of $32.5 billion. Quarterly revenue in the Oath business, which houses AOL, Yahoo and other brands, was $1.8 billion, down about 7% from the same period a year earlier. Management said the unit’s revenue is likely to be “flat in the near term,” adding that it doesn’t expect to meet its stated goal of Oath generating $10 billion in revenue by 2020.

       The Wireless segment had total revenues of $23.0 billion, an increase of 6.5% year over year; service revenues grew 0.8%; about 83% of Verizon’s postpaid phone base were on unsubsidized plans, compared with 78% in the same period last year; had 515,000 retail postpaid net additions; total retail postpaid churn was 1.04% compared with 0.97% year over year; operating income of $8.5 billion; and segment operating income margin was 37%. In the company’s Wireline unit, total revenues were $7.4 billion; Fios revenues were $3.0 billion; added a net of 54,000 Fios Internet connections, indicative of continued strong customer demand for high quality internet connectivity; and lost 63,000 Fios Video connections, impacted by ongoing shifts away from linear video offerings.

       Full-year earnings per share should easily top $4.64 vs. $3.76 last year and $4.75 is on tap for 2019. The shares, up 3.4% in today’s trading on the results, are at an 18-year high. At the recent quotation, this blue-chip equity offers above-average appreciation potential three to five years out. What’s more, the stock should draw attention from conservative income-seeking investors, as its dividend yield of 4.38%, is well above the market average.

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