Verizon Earnings Preview: Wireless Reception and Vodafone

Verizon Communications Inc. (NYSE:VZ) is due to release its earnings numbers for the three months through September 30 on Thursday morning before the market opens in New York. The wireless carrier’s results are expected to come with some analysis of the company’s new structure. During the course of the quarter Verizon bought the rest of its North American joint venture with Vodafone Group plc (NASDAQ:VOD) (LON:VOD).

Verizon Earnings Preview: Wireless Reception and Vodafone

In the run up to the release of these results, analysts studying Verizon Communications Inc. (NYSE:VZ) were looking for earnings of 74 cents per share for the company. In the same three months of 2012 Verizon managed to earn 64 cents per share. Revenue is expected to come in at $30.2 billion, up from last year’s takings of $29 billion.

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Wireless changes for Verizon

The wireless industry has been changing incredibly quickly in recent years, and companies like Verizon Communications Inc. (NYSE:VZ) are changing in order to stay afloat in the new business. The current atmosphere calls for huge investment into faster and faster networks. Verizon is still rolling out its LTE network in the United States, but a technology to replace it may take off in the next year.

Given the changes in the industry, Verizon Communications Inc. (NYSE:VZ) has been linked to many of the mergers and acquisitions that have happened in the last eighteen months in the world wireless industry. Verizon’s biggest part in those happenings was its deal to acquire the 50% stake of Verizon Wireless held by Vodafone Group plc (NASDAQ:VOD) (LON:VOD).

The conference call that Verizon will host at 8:30 AM EST should be full of questions about the future of the company in the wake of the Vodafone deal. Verizon Communications Inc. (NYSE:VZ) is changing along with the rest of the wireless industry, and it’s an unstable period for the company.

Verizon performance

Verizon Communications Inc. (NYSE:VZ) shares have underperformed the wider market in 2013. The company’s stock is up just 7% since January 1, far behind the 19% gains made by the S$P 500 in the same period. Investors have already priced a huge growth factor into Verizon; the company’s shares are trading at 85 times 2012 earnings.

The growth priced into the company is much higher than that priced into its biggest competitor AT&T Inc. (NYSE:T). Verizon is the first of the big U.S. carriers to report earnings, so investors will be watching the numbers for clues about the entire industry.