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.
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.