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



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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