Verizon has managed to post quarterly earnings roughly in line with expectations from analysts, posting revenues of $32.2 billion that missed estimates by $300 million, though its earnings per share of $1.06 is an increase of 3.9 percent compared to the first quarter of last year. Operating income for the
telecoms company was $7.9 billion with an operating income margin of 24.7 percent, and an EBITDA totaling $12 billion in the quarter.
The lion's share of revenue stems from its wireless business, which is down 1.5 percent compared to the same period last year at $22 billion. It is claimed the drop is due to customers changing to unsubsidized device payment plans, though service revenues plus installment billings increased 1.6 percent year-on-year. Operating income for the segment was $7.9 billion, with a margin of 35.8 percent, and wireless capital expenditures hit $2.2 billion, but is expected to ramp up throughout the year.
The carrier has 112.6 million retail connections and 107.2 million retail postpaid connections at the end of the quarter, up 3.7 percent and 4.4 percent year-on-year respectively, with an increase of 640,000 postpaid net additions in the quarter. Customer churn also improved, reported at 0.96 percent for the quarter. In terms of activations, there were 452,000 4G smartphones, along with 507,000 tablets during the period.
For the wireline business, Fios services are said to be the main driver of growth, representing 81 percent of revenues. Total consumer revenues were $4 billion, up 0.8 percent year-on-year, with Fios increasing 5 percent to $3.5 billion. Net new Fios Internet connections and video connections totaled 98,000 and 36,000 respectively for the quarter.
Verizon believes the full-year 2016 adjusted earnings to be "comparable to the company's strong
full-year 2015 adjusted earnings," which ended at $4.37 in earnings per share, a significant increase from the $2.42 EPS in 2014. The carrier does note "given the status of labor contract negotiations, there will be pressure on second-quarter earnings due to the timing of cost reductions."
Earlier this month, approximately
40,000 employees left their posts in the northeastern part of the US, to strike the stalling of contract talks between Verizon and two unions. Workers complain about the lack of a contract, as well as planned cuts to benefits schemes for healthcare and pensions, offshoring of callcenter jobs, and worker relocation issues.
Top