Conservative · Income · Stocks to Consider and Updates

Verizon Delivers In-Line Results; Inks Deal with Disney

Verizon Communications, Inc. (NYSE: VZ – $60.20) reported third quarter earnings of $1.25 a share, a penny above estimates and a modest 2% higher than a year-ago, on a 1% top-line improvement. Beginning in the June quarter, Verizon started reporting financial and operational results under its new operational structure: Consumer and Business.

       Total Verizon Consumer revenues for the period came in at $22.7 billion, up 1.4% year over year, with the much of the good news attributable to continued strong growth in wireless service revenue and FiOS service offerings, offset a bit by declines in wireless equipment and legacy wireline services. Consumer wireless service revenues were up 2.1%, driven by customer step-ups to higher-priced plans and an increase in connections per account. What’s more, the Consumer segment added 193,00 wireless retail postpaid net additions in the third quarter, while the Business division reported 408,000 such additions. bringing Verizon’s total number of retail connections to 118.7 million (up 1.5% year-over-year). Business segment revenues, which were basically flat, continue to be hurt by declines in legacy wireline products and the shift away from traditional linear video bundles.

       Verizon is on target to spend approximately $17 to $18 billion for on capital projects in 2019. These expenditures continue to support the launch and build-out of Verizon’s 5G Ultra Wideband network; the growth in data and video traffic on the company’s 4G LTE network; the deployment of significant fiber in markets nationwide; and the upgrade to Verizon’s Intelligent Edge Network architecture. Earlier in the week, Verizon and The Walt Disney Co. announced a wide-ranging agreement that will offer all Verizon wireless unlimited customers, new Fios Home Internet and 5G Home Internet customers 12 months of Disney+, its streaming service set to launch on November 12.  

       Verizon is on track to report 2019 earnings of approximately $4.81 a share, with a modest increase likely for 2020. This blue-chip stock – closing in on an all-time high – remains a good choice for conservative and income portfolios, thanks to its impressive 4.06% dividend yield and strong balance sheet.

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