Verizon Communications Inc. (NYSE:VZ) reported its first quarter results before opening bell, posting non-GAAP earnings per share of 84 cents on revenue of $31.82 billion. Analysts had been expecting the company to report earnings of 87 cents per share on $30.7 billion in revenue. GAAP earnings were $1.15 per share. That’s compared to 68 cents in both reported and adjusted earnings per share in the same quarter a year ago.
Breaking down Verizon’s results
The company reported a 7.5% increase in service revenues under the wireless division and a 6.7% increase in retail service revenues. Operating margin for the segment was 35%, while EBITDA margin was 52.1% on service revenues.
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In wireline, Verizon Communications Inc. (NYSE:VZ) reported a 6.2% increase in consumer revenues and an 11.3% increase in average revenue per user. FIOS revenues rose 15.5% year over year, and the company had 98,000 FIOS Internet customers and 57,000 FIOS video net additions.
Verizon closes on Verizon Wireless purchase
Verizon Communications Inc. (NYSE:VZ) said the results included impacts from the close of the $130 billion transaction to buy the rest of the Verizon Wireless joint venture. That deal closed in February, so the first quarter included just 5 weeks of impacts from full ownership of Verizon Wireless.
“We are already seeing the expected earnings accretion from the transaction,” said Verizon Communications Inc. (NYSE:VZ) Chairman and CEO Lowell McAdam in a statement. “The full access we now have to the significant cash flows of Verizon Wireless is energizing our efforts to provide customers with product and service innovations and to enable powerful solutions to some of the world’s biggest challenges.”
Verizon Communications Inc. (NYSE:VZ) said it has posted double-digit percentage growth in both earnings per share and income for the fifth quarter in a row.
Verizon guides for 2014
The company reaffirmed its guidance of 4% topline growth for the full year and adjusted consolidated EBITDA margin expansion. Verizon Communications Inc. (NYSE:VZ) expects to see continued positive contributions to profits from both its wireline and wireless division.
Verizon Communications Inc. (NYSE:VZ) noted that pricing under its Verizon Edge program had little impact on first quarter average revenue per account and EBITDA margin. The program enables customers to purchase a new smartphone at a low cost up front and then make cheaper monthly payments. Verizon said it expects adoption of the Edge program will continue, impacting service revenue growth further in future quarters as service revenues shift over to equipment revenues.
The company also reiterated its guidance of increases in EBITDA and EBITDA margin in both wireless and wireline.