Verizon 1Q15 Wireless Revenue Grows Year-over-Year



Wireless segment supported Verizon’s revenue growth in 1Q15

In the previous part of this series, we learned about Verizon’s (VZ) largest segment—wireless. Here, we’ll look at the segment’s quarterly performance.

Verizon’s wireless segment continued to support the telecom company’s consolidated revenue growth in 1Q15. Verizon 1Q15 wireless revenue increased by ~6.9% year-over-year to ~$22.3 billion during the quarter. However, it declined ~4.8% sequentially, largely due to higher revenues generated during the holiday season last quarter, coupled with the launch of Apple’s (AAPL) iPhone 6 just before 4Q14.

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Service revenue decreased marginally in 1Q15

The year-over-year revenue growth of Verizon’s wireless segment was dampened by a decline in the segment’s service revenue. These are the stable revenue streams of wireless carriers such as AT&T (T), Sprint (S), and T-Mobile (TMUS). The wireless segment’s service revenue declined by ~0.4% year-over-year to ~$17.9 billion in 1Q15. The main reason why relates to the telecom company’s postpaid ARPA, or average revenue per account, which fell ~2.2% year-over-year in the quarter.

Growth in equipment revenue in 1Q15

Robust growth in equipment revenue supported 1Q15 revenue growth in Verizon’s wireless segment. These equipment revenues increased by ~80.4% year-over-year to ~$3.4 billion in 1Q15. Installment billings related to Verizon’s Edge plan positively impacted this growth. For more on this plan, please read Verizon’s Edge Accounts Continue to Increase.

The popularity of Verizon’s Edge plan also grew significantly year-over-year in 1Q15. According to the company, the plan accounted for ~39% of the phones activated during the quarter. This figure was ~13% in 1Q14.

You can get diversified exposure to Verizon by investing in the SPDR S&P 500 ETF Trust (SPY). SPY held ~1.1% in the company on March 31, 2015.

You can get more diversified exposure to Verizon by investing in the iShares MSCI ACWI ETF (ACWI). ACWI held ~0.5% in the company on the same date. Meanwhile, investors should be aware that ACWI also held ~0.4% in AT&T and ~0.01% in Sprint (S).


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