Post Earnings Coverage as Verizon’s Revenue Topped Market Estimates

Upcoming AWS Coverage on AT&T Inc. Post-Earnings Results

LONDON, UK / ACCESSWIRE / January 27, 2017 / Active Wall St. announces its post-earnings coverage on Verizon Communications Inc. (NYSE: VZ). The Company released its fourth quarter and fiscal 2016 results on January 24, 2017. The No. 1 U.S. wireless carrier reported a y-o-y decline in revenue and earnings. Register with us now for your free membership at:

http://www.activewallst.com/register/

One of Verizon Communications’ competitors within the Telecom Services – Domestic space, AT&T Inc. (NYSE: T), reported its Q4 2016 financial numbers on January 25, 2017, after markets close. AWS will be initiating a research report on AT&T in the coming days.

Today, AWS is promoting its earnings coverage on VZ; touching on T. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=VZ

http://www.activewallst.com/registration-3/?symbol=T

Earnings Reviewed

For the three months ended December 31, 2016, Verizon’s total consolidated operating revenues were $32.34 billion, a 5.6% drop compared to Q4 2015 revenue of $34.25 billion. The Company’s revenue numbers came in above market forecasts of $32.08 billion. The Company’s FY16 revenues totaled $126.0 billion, down 4.3% on a y-o-y basis. Excluding revenues from since-divested local landline businesses and AOL, adjusted full-year total operating revenues would have declined approximately 2.4%.

For Q4 2016, Verizon posted net income of $4.6 billion, or $1.10 per share, down from $5.51 billion, or $1.32 per share, in the year earlier same quarter. The Company’s adjusted EPS of $0.86 excluded $0.24 per share in net gains related to mark-to-market pension and OPEB (other post-employment benefits) adjustments and severance-related costs. The Company’s adjusted earnings figures missed analysts’ consensus estimates of $0.89 per share. For FY16, Verizon reported net income of $13.61 billion and EPS of $3.21.

Segment Results

Verizon Wireless

For Q4 2016, Verizon reported 591,000 retail postpaid net additions. The 591,000 retail postpaid net additions included 552,000 4G LTE smartphones. The Company stated that with declines in basic and 3G phones, net phone additions were 167,000 in the reported quarter, compared to a net decrease of 36,000 in Q3 2016.

At year-end 2016, Verizon had 114.2 million retail connections, a 1.9% y-o-y increase. Verizon’s retail postpaid connections base grew 2.1% to 108.8 million, and retail prepaid connections totaled 5.4 million. The Company’s full-year postpaid net additions of 2.3 million included 1.8 million 4G smartphones and 1.4 million 4G tablets offset primarily by declines in basic phones and 3G smartphones. The Wireless segment’s revenues totaled $23.4 billion in Q4 2016, a decline of 1.5% compared to Q4 2015. For FY16, revenues totaled $89.2 billion, a decline of 2.7%.

Verizon’s Retail postpaid churn was 1.10% in Q4 2016, 14 basis points increase on y-o-y as strong retention in the phone base was offset by increased churn in tablets. In the reported quarter, retail postpaid phone churn remained below 0.90% for the 7th consecutive quarter.

At year-end 2016, approximately 67% of the Verizon’s Wireless segment postpaid phone customers were on a non-subsidized service pricing plan, ahead of target due to high volumes in Q4 2016. The percentage of phone activations on device payment plans increased to approximately 77% in Q4 2016 compared to 67% in Q4 2015. Verizon expects Q1 2017 take rate for device payment plans to be similar to Q4 2016.

Segment operating income in Q4 2016 was $6.3 billion, and segment operating income margin was 27.0%. In the reported quarter, Verizon Wireless generated $8.6 billion in segment EBITDA, a y-o-y drop of 5.2%. Segment EBITDA margin on total revenues was 36.9% compared to 38.4% in Q4 2015.

Wireline highlights

During Q4 2016, Verizon’s total wireline revenues decreased 3.1%, to $7.8 billion. The segment’s retail consumer revenues grew 0.2% to $3.2 billion, supported by consumer Fios revenue growth. During the reported quarter, total Fios revenues grew 4.4%, to $2.9 billion. FY16, Fios revenues were $11.2 billion, a 4.6% increase compared to FY15. In Q4 2016, Verizon added a net of 68,000 Fios Internet connections and 21,000 Fios Video connections. At year-end 2016, Verizon had 5.7 million Fios Internet connections and 4.7 million Fios Video connections.

During Q4 2016, Wireline operating income was $414 million compared to $7 million in Q4 2015. Segment operating income margin was 5.3% in the reported quarter. Segment EBITDA was $1.9 billion in Q4 2016, up 17.7% from Q4 2015, while segment EBITDA margin was 24.1% in Q4 2016, compared to 19.8% in Q4 2015.

Cash

On the books, Verizon’s cash, cash equivalents, and short-term investments totaled $2.88 billion at the end of the quarter versus $4.82 billion at the end of the same period of last year. During FY16, Verizon invested in its networks with $17.1 billion in capital expenditures, completed wireline divestitures of three markets, negotiated new labor contracts, executed successful technical trials of 5G wireless service and expanded its new growth businesses.

Guidance

For FY17, Verizon expects consolidated revenues, on an organic basis, to be fairly consistent with FY16, with improvement in wireless service revenue and equipment revenue trends. The Company expects full year 2017 consolidated adjusted EPS trends to be similar to consolidated revenue trends. Consolidated capital spending for full year 2017 is projected to be in the range of $16.8 billion to $17.5 billion and minimum pension funding requirements of approximately $600 million in full year 2017.

Stock Performance

On Thursday, January 26, 2017, Verizon’s stock fell 1.31%, ending the trading session at $49.12. A total volume of 37.86 million shares were traded at the end of the day, which was higher than the 3-month average volume of 14.98 million shares. In the previous three months, shares of the Company have advanced 3.77%. Moreover, the stock gained 4.54% in the past twelve months. The stock is trading at a PE ratio of 14.31 and has a dividend yield of 4.70%.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”) represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street

ReleaseID: 453660