Verizon Communications Inc. (NYSE:VZ) released its latest earnings report before opening bell this morning. The mobile carrier and internet service provider reported non-GAAP earnings of 86 cents per share on $34 billion in revenue. Analysts had been expecting Verizon earnings to come in at 88 cents per share on $33.2 billion in revenue for Q4. In the same quarter a year ago, the company reported $32.3 billion in revenue and 86 cents per share in earnings.
Verizon earnings boosted by tax benefit
On a GAAP basis, Verizon earnings rose to $4.56 per share on the back of a tax-related benefit, compared to the $1.10 per share the company posed in Q4 of 2016. The GAAP result includes a positive impact of $4.10 per share from the remeasurement of the firm’s deferred tax liabilities and the lower corporate tax rate in connection with tax reform. Verizon management expects tax reform to have a positive impact on cash flow of about $3.5 billion to $4 billion in 2018, and they plan to use the extra cash flow mostly to strengthen the company’s balance sheet.
Wireless revenues rose 1.7% year over year to $23.8 billion. Verizon Wireless added 1.2 million retail postpaid connections in Q4, including 647,000 postpaid smartphone net adds, compared to the 456,000 smartphones the company added in the same quarter a year ago. Retail postpaid churn improved 10 basis points year over year to 1%. Oath revenues rose 10% quarter over quarter to $2.2 billion in Q4, while telematics revenues surpassed $230 million. Internet of Things revenues jumped 17% year over year.
Relying On Old-Fashioned Stock Picking, Lee Ainslie Reports His “Strongest Quarter” Ever
Lee Ainslie's Maverick Fund USA enjoyed its "strongest quarter in the fund's history" during the three months to the end of June. According to a copy of the firm's second-quarter letter to investors, which ValueWalk has been able to review, Maverick Fund USA gained 18% in the second quarter. Following this performance, the fund was Read More
Wireline revenues grew 0.1% year over year in Q4 to $7.6 billion. Fios revenues increased 2.3%, and Verizon added 47,000 Fios Internet connections but lost 29,000 Fios Video connections.
Verizon releases 2018 guidance
For 2018, management expects Verizon earnings to grow in the low-single digit percentages on an adjusted basis. They expect full-year GAAP revenues to increase in the low-single digit percentages also, including impacts from the new revenue recognition standards. Excluding those impacts, they said the company is on track to achieve growth in wireless service revenue on a year-over-year basis by mid-year.
Following the Verizon earnings release, the company’s stock jumped by more than 1% to as high as $54.05 in premarket trading this morning.