Verizon Communications Inc. VZ recorded relatively healthy fourth-quarter results with adjusted earnings and revenues beating the respective Zacks Consensus Estimate.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The company recorded consolidated postpaid net additions of 1,413,000 in the quarter along with retail postpaid phone net additions of 568,000. Total broadband net additions for the quarter were 408,000, including 373,000 fixed wireless net additions.
Net Income
On a GAAP basis, net income in the quarter was $5.11 billion or $1.18 per share against a net loss of $2.57 billion or a loss of 64 cents per share in the prior-year quarter. The significant improvement was primarily attributable to a pre-tax gain from special items of $477 million in the reported quarter and a goodwill impairment charge of $5.84 billion in the year-ago quarter. Excluding non-recurring items, quarterly adjusted earnings were $1.10 per share compared with $1.08 in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by a penny.
For 2024, Verizon recorded a net income of $17.95 billion or $4.14 per share compared with $12.09 billion or $2.75 per share in 2023. Adjusted earnings for 2024 were $4.59 per share compared with $4.71 in 2023.
Revenues
Quarterly total operating revenues improved 1.6% to $35.68 billion with growth in service revenues and higher wireless equipment revenues driven by targeted pricing actions, customer growth, sales of perks and add-on services and growth in fixed wireless access. The top line beat the consensus estimate of $35.4 billion. For 2024, revenues improved 0.6% to $134.79 billion.
Quarterly Segment Results
Consumer: Total revenues from this segment improved 2.2% year over year to $27.56 billion on higher service revenues. However, the segment revenues missed our estimate of $27.17 billion.
Service revenues were up 2.6% to $19.41 billion, while wireless equipment revenues improved 0.8% to $6.49 billion. Other revenues totaled $1.66 billion, up 4.2% year over year.
The segment recorded 426,000 wireless retail postpaid phone net additions and 65,000 wireless retail prepaid net additions in the quarter. Wireless retail postpaid churn was 1.12%, while retail postpaid phone churn was 0.89%. The company recorded 47,000 Fios Internet net additions as high demand for reliable fiber optic broadband was spurred by higher video consumption. Fixed wireless broadband net additions were 216,000 for the quarter. However, Verizon registered 60,000 Fios Video net losses in the quarter, reflecting the ongoing shift from traditional linear video to over-the-top offerings.
The segment’s operating income decreased 1.9% to $6.9 billion with a margin of 25.1%. EBITDA declined 0.4% to $10.3 billion with a margin of 37.5% compared with 38.5% in the prior-year quarter due to lower costs of wireless equipment.
Business: The segment revenues were down 1.5% to $7.5 billion due to lower wireline revenues, partially offset by growth in wireless service revenue. It also was lower than our estimates of $7.53 billion largely due to challenging macroeconomic conditions.
The segment had 283,000 wireless retail postpaid net additions in the quarter, including 142,000 postpaid phone net additions. Wireless retail postpaid churn was 1.45%, while retail postpaid phone churn was 1.09%. Fixed wireless broadband net additions were 157,000 for the quarter.
Operating income improved to $594 million from $443 million in the year-ago quarter with respective margins of 7.9% and 5.8%. EBITDA was up 3% to $1.66 billion owing to an improvement in wireless service revenues for a margin of 22.1% compared with 21.1% in the year-earlier quarter.
Other Quarterly Details
Total operating expenses decreased 18.2% year over year to $28.3 billion, while operating income improved to $7.42 billion. Consolidated adjusted EBITDA increased to $11.93 billion from $11.68 billion led by wireless service revenue growth and perceived benefits from lower upgrade volumes for respective margins of 33.4% and 33.2%.
Cash Flow & Liquidity
Verizon generated $36.91 billion of net cash from operating activities in 2024 compared with $37.47 billion in 2023. The decline was primarily due to higher working capital requirements owing to higher interests and higher taxes. Free cash flow was $5.36 billion for the quarter compared with $4.07 billion in the prior-year period.
As of Dec. 31, 2024, the company had $4.19 billion in cash and cash equivalents with $121.38 billion of long-term debt compared with respective tallies of $2.06 billion and $137.7 billion in the year-ago period.
Guidance
For 2025, Verizon expects wireless service revenue growth in the range of 2%-2.8%. Adjusted EBITDA is likely to grow 2%-3.5%. The company expects adjusted earnings to grow 0-3% range with a cash flow of $35-$37 billion on capital expenditures of $17.5-$18.5 billion.
Zacks Rank & Stock to Consider
Verizon currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Arista Networks Inc. ANET is scheduled to release fourth-quarter 2024 earnings on Feb. 18. The Zacks Consensus Estimate for earnings is pegged at 57 cents per share, suggesting a growth of 9.6% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 17.1%. ANET delivered an average earnings surprise of 14.8% in the last four reported quarters.
Akamai Technologies, Inc. AKAM is slated to release fourth-quarter 2024 earnings on Feb. 20. The Zacks Consensus Estimate for earnings is pegged at $1.52 per share, indicating a decline of 10.1% from the year-ago reported figure.
Akamai has a long-term earnings growth expectation of 6.1%. AKAM delivered an average earnings surprise of 2.7% in the last four reported quarters.
Pinterest, Inc. PINS is set to release fourth-quarter 2024 earnings on Feb. 6. The Zacks Consensus Estimate for earnings is pegged at 63 cents per share, implying a growth of 18.9% from the year-ago reported figure.
Pinterest has a long-term earnings growth expectation of 33%. PINS delivered an average earnings surprise of 17% in the last four reported quarters.
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