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Verizon’s 2015 Revenue Should Grow by 4% or More

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Verizon’s 2014 revenue

In this series, we will analyze the factors that should affect Verizon’s (VZ) performance in 2015. Verizon is the largest telecommunications company in the US, with AT&T (T) in second place. Both AT&T and Verizon have wireless and wireline operations.

Verizon reported its 2014 results on January 22, 2015. As you can see in the above chart, the telecommunications company’s revenue grew by ~5.4% during the year. Verizon’s wireless segment drove the revenue growth in 2014, and the segment’s revenue increased by ~8.2% during the year.

However, the continued contraction of wireline revenues subdued the consolidated revenue growth during the year. Verizon’s wireline segment’s revenues declined by ~0.5% during 2014.

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Management guidance and analyst views on Verizon’s 2015 revenue

Verizon expects to achieve a minimum 4% revenue growth in 2015. This annual growth translates into ~$132.2 billion in revenues for the company in 2015. Verizon reported consolidated revenues of ~$127.1 billion in 2014.

Wall Street analysts are forecasting a lower growth rate of ~3.7% for Verizon’s 2015 revenue. Based on the consensus estimates of 30 of these analysts, Verizon’s 2015 revenue should be ~$131.7 billion. Nonetheless, these analysts expected Verizon’s 2014 revenue to be marginally lower than was reported by the telecommunications company. Verizon’s consolidated revenue beat analyst forecasts by ~0.5% in 2014.

You can take a diversified exposure to Verizon by investing in the SPDR S&P 500 ETF (SPY), which held ~1.1% in the company on March 31, 2015. You can take a more diversified exposure to Verizon by investing in the iShares MSCI ACWI ETF (ACWI), which held ~0.5% in the company on the same date. ACWI also held ~0.4% in AT&T and ~0.01% in Sprint (S) on March 31.

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