Verizon Communications drops following quarterly results
Profits at US telecommunications giant Verizon Communications dropped sharply at the start of 2015, although growth in customers numbers remained strong thanks to promotions.
Fixed Line Telecommunications
1,811.94
16:40 08/05/24
Verizon Communications
$54.05
16:59 30/03/16
First quarter net income declined 27.5% to reach $4.4bn or $1.02 per share in adjusted terms.
Analysts had been anticipating earnings per share of 95 cents.
Revenues in the first three months of the year increased by 3.8% to reach $31.9bn (consensus: $32.3bn), as the number of net retail postpaid connections grew by 565,000. However, the main driver of those new clients was a promotion including free tablets.
However, in parallel the company lost 138,000 phone users.
Operating margins on an EBITDA basis improved to 37.4% from 36.7% in the previous quarter.
During the reporting period Verizon sold its local wireline operations serving customers in three states to Frontier Communications and monetized wireless tower assets in a transaction with American Tower.
Including a non-recurring $2.4bn related to the monetization of tower assets, cash flow from operating activities increased to $10.2bn in the first three months of 2015, compared with $7.1bn in first-quarter 2014.
Proceeds from those disposals will help Verizon pay for the $10.4bn acquisition of airwaves at an auction in January.
Excluding the tower-transaction impact, quarterly free cash flow reached approximately $4.2bn, compared to $3.0bn one year ago.
As of 18:05 shares in the company were 0.48% lower at $49.15.