Verizon came up short on the top line in its earnings report.Shares of Verizon Communications (VZ -4.50%) were falling today after the telecom giant posted disappointing revenue results on weakness in wireless equipment and due to a slow phone upgrade cycle.As of 11:44 a.m. ET, Verizon stock was down 4.3%. Verizon underwhelmsVerizon's core wireless service business continued to deliver steady growth, up 2.7% to $19.8 billion with 239,000 retail postpaid netphone additions, meaning monthly paying customers. ...

Vladimir Dimitrov, CFA is a former strategy consultant within the field of brand and intangible assets valuation. During his career in the City of London he has been working with some of the largest global brands within the technology, telecom and banking sectors.Analyst’s Disclosure: I/we have a beneficial long position in the shares of VZ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (oth ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Financial Data and Key Metrics - Wireless service revenue grew by 2.7% YoY, with the company reporting the highest-ever quarterly EBITDA of $2.5 billion [5] - Free cash flow for the quarter was $6 billion, reflecting strong cash flow generation [5] - Year-to-date wireless service revenue increased by 3.1%, or $1.8 billion, with adjusted EBITDA reaching $12.5 billion in Q3 [51] - Free cash flow year-to-date was $14.5 billion, consistent with the prior year, despite a $2.5 billion increase in cash taxes [51] Business Line Performance - Postpaid net adds were 239,000, with 81,000 phone net adds in the consumer segment [6][29] - Prepaid net adds turned positive, with approximately 80,000 net adds excluding SafeLink [6] - Business segment consistently added between 125,000 to 150,000 net adds per quarter [6] - Broadband net adds were 389,000, with fixed wireless access (FWA) subscribers growing by over 1.5 million [50] - FWA revenue exceeded $550 million per quarter, with nearly 12 million broadband customers [14] Market Performance - The company achieved its FWA target of 4-5 million subscribers 15 months ahead of schedule, with plans to double FWA subscribers to 8-9 million by 2028 [6][15] - Fios performance rebounded after a weaker Q2, with the team targeting 35-40 million fiber passings post-Frontier acquisition [6][15] - The company announced deals with FIFA and Madison Square Garden Group for private networks, leveraging mobile edge compute capabilities [7] Strategy and Industry Competition - The company is focused on expanding its total addressable market (TAM) through investments in fiber, FWA, and mobility, aiming to cover over 100 million households [15][16] - Verizon's strategy includes a mobility-first approach, with C-Band and millimeter wave deployments driving both mobile and FWA growth [19][22] - The company is leveraging AI for customer care personalization and operational efficiencies, with potential revenue opportunities in compute storage and mobile edge compute [13] - The refreshed brand and customer-first offerings, including myPlan and myHome, are resonating with the market [10][11] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in meeting full-year guidance for wireless service revenue and EBITDA, with performance at or above the midpoint [7][51] - The company is focused on sustainable growth in service revenue, EBITDA, and cash flow, driven by investments in broadband and mobility [16][58] - Management highlighted the importance of network resilience, especially during natural disasters, and the company's ability to quickly restore services [3][4] Other Important Information - The company announced a tower transaction and a spectrum acquisition from US Cellular, adding capacity and creating more competition in the market [12] - Verizon's loyalty program, myAccess, offers exclusive deals and once-in-a-lifetime experiences, contributing to customer retention [46][47] - The company is targeting 7 million perk subscriptions, with plans to double this number by 2025, driving margin-rich revenue streams [45][124] Q&A Session Summary Question: Thoughts on the BEAD program and the bifurcation of fiber and FWA opportunities - The company plans to participate in the BEAD program where it makes sense, focusing on ROI in the Fios footprint [61] - Verizon's strategy is to deploy C-Band for mobility first, with FWA as a secondary opportunity, offering customers optionality between Fios and FWA [62][63] Question: Fixed wireless cadence and service revenue growth expectations - The company expects FWA net adds to be on the lower end of 350,000-400,000 in the short term due to C-Band deployment in suburban and rural areas [65] - Management did not provide specific 2025 guidance but highlighted actions taken to position the company for sustained growth, including prepaid turnaround and FWA growth [67] Question: Free cash flow outlook and Frontier deal - Management did not guide on free cash flow but noted headwinds such as cash taxes and interest rates, while emphasizing EBITDA growth as a focus [73] - The Frontier deal is seen as fair and good for all stakeholders, with no plans to increase the offer price [72] Question: Fiber expansion pace and FWA targets - The company is comfortable with its current pace of fiber expansion, combining Fios and FWA to serve customers with optionality [76] - FWA targets include business customers, with plans to cover 90 million homes and businesses by 2028 [97][99] Question: AI and satellite opportunities - AI is seen as a long-term revenue opportunity, particularly in enterprise applications, while satellite connectivity is still in early stages for consumer use [107][108] - Network slicing and satellite connectivity are expected to provide new revenue streams, particularly in the business segment [108] Question: Growth expectations and AI impact on upgrade cycles - Management is focused on growing wireless service revenue sustainably, leveraging postpaid momentum and new investments in fiber and FWA [113] - AI's impact on consumer device upgrade cycles is still uncertain, with the company maintaining a disciplined approach to promotions and retention [116] Question: Perks portfolio and wholesale partnerships - The company is satisfied with its perks portfolio, focusing on exclusive, high-value offerings with strong customer savings and margin accretion [124][125] - Verizon's unique ability to combine perks like MAX and Netflix provides a competitive advantage, driving customer retention and revenue growth [127][128] Question: Fiber and wireless market share correlation - The company sees a 500 basis point improvement in wireless market share in markets with fiber, driven by better marketing, distribution, and cross-sell opportunities [132][133] - Fiber economics are improving due to cost reductions, faster penetration rates, and mobile-plus-home benefits [131][132]

3Q 2024 Earnings October 22, 2024 "Safe Harbor" Statement In this presentation we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words "anticipates," "assumes," "believes," "estimates," "expects," "forecasts," "hopes," "intends ...

Stock Performance and Valuation - Verizon Communications stock trades at $41 90, down 4 12% with a 52-week range of $31 26 to $45 36 [1] - The stock has a dividend yield of 6 47%, a P/E ratio of 15 69, and a price target of $46 31 [1] - The stock is considered a deep value relative to its historical average and the S&P 500, with a beta of nearly 0 5x [1] - The stock is poised for a sustained rally, potentially reaching $48 this year and $58 next year, representing gains of 10% and 35% respectively [1] Financial Performance and Outlook - Q3 2024 revenue was $33 33 billion, down 0 1% due to an 8% decline in equipment sales, but services revenue grew 1 7% [1][2] - Adjusted EBITDA increased year-over-year, with free cash flow stable at $4 5 billion, down only $0 1 billion despite severance charges [3] - The company reaffirmed its guidance, targeting adjusted EPS of $4 50 to $4 70, with a midpoint of $4 60, better than the consensus forecast of $4 57 [3] - The company expects continued growth in wireless and broadband subscribers, driven by 5G network expansion and increased use cases in consumer and business applications [2] Analyst Sentiment and Dividend - Analysts upgraded Verizon's rating to Buy from Hold and raised the price target by nearly 10%, with a consensus target of $46 30 [4] - The stock yields 6 43% with an annual dividend of $2 71 and a 20-year track record of dividend increases [4] - The dividend payout ratio is 101 12%, but the balance sheet supports continued payments and growth, with shareholder equity increasing by 4% [5] - Verizon is on track to become a Dividend Aristocrat by 2029 [5] Market Opportunity and Balance Sheet - The recent pullback in stock price presents a buying opportunity, with potential for a sustained rally lasting four to six quarters [6] - The balance sheet shows positive cash flow, a doubling of cash balance, rising assets, and declining liabilities, with leverage down 15 basis points to 1 3x equity [5] - The company maintains a flexible financial position, utilizing debt but keeping leverage low [5]

For the quarter ended September 2024, Verizon Communications (VZ) reported revenue of $33.33 billion, down 0% over the same period last year. EPS came in at $1.19, compared to $1.22 in the year-ago quarter.The reported revenue represents a surprise of -0.60% over the Zacks Consensus Estimate of $33.53 billion. With the consensus EPS estimate being $1.18, the EPS surprise was +0.85%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to de ...

Verizon Communications Inc. (VZ) recorded relatively healthy third-quarter results with adjusted earnings beating the Zacks Consensus Estimate but the top line missing the same. Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The company recorded consolidated postpaid net additions of 349,000 in the quarter along with retail postpaid phone net additions of 239,000. Total broadband net additions for the quarter were 389,000, including 363,000 fixed wireless net additions.Net IncomeOn a ...

Key TakeawaysVerizon shares fell Tuesday morning after the company's third-quarter revenue and net income came in below analysts' expectations.Adjusted profits narrowly beat estimates after accounting for over $2 billion in one-time costs.The telecommunications giant also affirmed its full-year outlook. Verizon (VZ) reported third-quarter results below analysts' expectations Tuesday morning, despite continuing to add wireless phone and internet subscribers. The telecommunications giant reported $33.33 billi ...

Core Insights - Verizon has achieved its fixed wireless access subscriber target 15 months ahead of schedule, with a current total of nearly 4.2 million fixed wireless subscribers, reflecting a year-over-year increase of nearly 57% [2][3] - The company aims to double its fixed wireless subscribers to 8-9 million by 2028 and expand coverage to 90 million households [2] - Verizon's fiber network is expected to grow to 35-40 million passings over time, with the acquisition of Frontier expected to add approximately 9-10 million fiber passings [3] Fixed Wireless Access - Verizon's fixed wireless subscribers have increased significantly, reaching nearly 4.2 million by the end of Q3 2024, which is a nearly 57% increase year-over-year [2] - The company plans to double its fixed wireless subscriber base to 8-9 million by 2028, with coverage expansion to 90 million households [2] - The launch of advanced mmWave solutions for high-density areas is expected to enhance deployment efficiency and reduce costs [2] Fiber Network Expansion - Verizon is targeting an expansion of its Fios builds to up to 650,000 passings annually in 2025, with a combined build of up to 1 million or more passings annually post-Frontier acquisition [3] - The company anticipates more than 30 million fiber passings in the combined Verizon/Frontier footprint by 2028, with a long-term goal of 35-40 million passings [3] - The integration of Frontier's fiber network into Verizon's existing Fios network is expected to enhance service delivery [3] Financial Outlook - Verizon expects capital expenditures for 2025 to be in the range of $17.5-$18.5 billion, maintaining historical levels of capital intensity [5] - The company has revised its net unsecured debt to adjusted EBITDA ratio target to 2.0 to 2.25x [5] - Verizon's capital allocation priorities include prudent investment, maintaining an industry-leading dividend, and efficient cash return to shareholders [4]