Verizon’s 4Q14 Revenues Increase Modestly



The wireless segment’s robust performance drives Verizon’s 4Q14 revenue growth

In the previous parts of this series, we looked at the results of Verizon’s (VZ) wireless segment in 4Q14. We learned that the company’s wireless revenues grew ~11% year-over-year to reach ~$23.4 billion during the quarter. The segment’s topline growth came predominantly from equipment revenues. High growth in device activations—particularly smartphones—contributed to the rise in Verizon’s equipment revenues during the quarter.

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The fourth quarter was marked by the usual strong retail sales volumes owing to the holiday season. However, the launch of Apple’s (AAPL) iPhone 6 in September 2014 facilitated the growth of Verizon’s equipment revenues. Other national wireless carriers—AT&T (T), T-Mobile (TMUS), and Sprint (S)—also reported growth in device sales during this period.

The robust performance of Verizon’s wireless division helped the company grow its consolidated revenue base in 4Q14. As you can see in the above chart, Verizon’s 4Q14 revenues increased ~6.8% year-over-year to reach ~$33.2 billion.

Lackluster performance of the wireline segment dampens Verizon’s 4Q14 revenue growth

The muted performance of Verizon’s wireline division continued to affect the company’s consolidated revenue growth. The segment’s revenues declined ~1.6% year-over-year to reach ~$9.6 billion in 4Q14. The modest increase in consumer wireline revenues couldn’t offset the decrease in revenues from the enterprise and wholesale businesses during the quarter.

If you want to take on diversified exposure to Verizon, you can invest in the Technology Select Sector SPDR Fund (XLK). The ETF held ~5% in the company on March 19, 2015.

You can get more diversified exposure to Verizon by investing in the iShares Russell 1000 Growth ETF (IWF). The ETF held ~1.8% in the company on the same date.


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