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Verizon - Shares up as revenues beat forecasts

George Salmon | 28 July 2017 | A A A
Verizon - Shares up as revenues beat forecasts

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Verizon Communications Inc Com Stk US0.10

Sell: 56.65 | Buy: 56.66 | Change 0.27 (0.48%)
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Shares in Verizon rose 7.7% after second quarter results were released. The group beat market forecasts to deliver revenues of $30.5bn, level with the prior year.

Excluding exceptional items, second quarter earnings per share were $0.96, up from $0.94 in Q2 2016.

The wireless division saw a net increase of 614,000 retail postpaid connections in the quarter, following the launch of the Verizon Unlimited service in mid-February. Smartphone additions of 590,000 compares with 336,000 last year. Total postpaid customers increased to 109.1m, with churn of 0.94% steady year-on-year.

However, higher customer numbers have not translated into higher revenues. Revenue dipped 1.9% to $21.3bn, with operating income of $7.4bn down from $8bn last year.

In the wireline division, reported revenue rose 1.2% to $7.8bn. On a comparable basis, which means excluding revenues from newly the acquired XO Communications and divested data centres, revenue declined 2.8%. Operating income was $68m, compared with a loss of $524m last year, which was impacted by a work stoppage.

Looking ahead, the group expects full year organic revenues, and earnings per share to be broadly consistent with 2016 levels. Capital expenditure for 2017 to be in the range of $16.8bn to $17.5 bn.

Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.