Verizon beats expectations, shares rise.
Verizon released earnings Thursday morning before the bell with EPS of 59 cents per share, beating consensus expectations by a penny. They had 4.6% year over year quarterly revenue growth, driven primarily from their wireless segment. The wireless segment had 7.7% year over year growth in service revenues; 8.9% year over year increase in retail service revenues, the highest growth rate in three years; and also saw data revenues up 21.1%. Operating margins were up to 28.6% due to a decrease in iPhone sales. They also saw increases of 501,000 net postpaid customer additions, which are the more lucrative customers for Verizon. Of postpaid subscribers, nearly 47% own smartphones, up from 43.5% last quarter. Verizon’s 4G LTE network continued expansion now reaching more than 200 million people in 230 markets, and also introduced five new 4G LTE devices.
Verizon’s Residential segment also saw growth as demand for their FIOS services led revenue growth. Consumer revenues grew 1.7%, and Global enterprise revenues grew .9%. Their strategic services which consist of cloud services, security and IT solutions, and strategic networking, grew 11.6% and represented 51% of global enterprise revenues.
Verizon continues to show growth potential with its 4G LTE network and its FIOS services, which should drive earnings and share price in the future. As iPhone sales drop they will see increased margins due to lower subsidized costs. Verizon is still the number one cell phone provider in the United States and that likely will not change in the near future. Verizon is up 52 cents (1.38%) heading into the close of trading.