FiOS Jumps, but Not Enough for Verizon 1Q15 Wireline Revenue



Verizon 1Q15 wireline revenue

In the earlier parts of this series, we learned about the 1Q15 performance of Verizon’s (VZ) wireless segment. Here, we’ll look at the telecom company’s wireline segment’s performance during the quarter.

The declining trend in Verizon’s wireline revenue continued in 1Q15. The telecom company’s wireline revenue decreased by ~2% year-over-year to ~$9.5 billion in 1Q15. The two larger subsegments of Verizon’s wireline division—enterprise and wholesale—were responsible for the year-over-year decline in the segment’s overall quarterly revenue. In contrast, FiOS continued to contribute positively to the segment’s top line in 1Q15.

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Robust year-over-year growth in FiOS revenue in 1Q15

FiOS revenue increased ~10.2% year-over-year to ~$3.4 billion in 1Q15. The revenue growth was driven by a higher subscriber base as well as an increase in per connection revenue during the quarter. FiOS connections have grown by 8.3% between 1Q14 and 1Q15. The company added 90,000 FiOS video subscribers and 133,000 FiOS Internet subscribers during 1Q15.

In the consumer wireline subsegment, the take-up of Quantum—the high-speed FiOS Internet service—by FiOS subscribers increased again during the quarter. For more on this, read Key Drivers of Verizon’s FiOs Revenue Growth in 4Q14.

Enterprise and wholesale revenue declined in 1Q15

The enterprise segment’s revenue fell ~6% year-over-year to ~$3.3 billion in 1Q15. The enterprise segment includes core and strategic services. Shrinking core services revenue is largely responsible for the revenue decline. Core services revenue decreased by ~13.2% year-over-year to ~$1.2 billion in 1Q15. Strategic service revenue also declined year-over-year during 1Q15. As well, the wireline wholesale subsegment’s revenue declined by ~3.7% year-over-year to ~$1.5 billion in 1Q15.

If you want to get diversified exposure to Verizon, you can invest in the iShares Russell 1000 Growth ETF (IWF). IWF held ~1.8% in the telecom company on March 31, 2015. You can get more diversified exposure to Verizon by investing in the SPDR S&P 500 ETF Trust (SPY). SPY held ~1.1% in the company on the same date.


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