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Chart in Focus: Verizon’s Earnings Trend in 4Q17

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Verizon’s EBITDA trend over the past few quarters

In the previous part, we discussed the total revenue growth from Verizon (VZ) in 4Q17. Let’s take a look at the consolidated adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] growth from Verizon in 4Q17. On the operating profitability front, Verizon’s consolidated adjusted EBITDA strengthened YoY (year-over-year) in 4Q17.

Verizon reported adjusted EBITDA of $10.9 billion in 4Q17, up from $10.3 billion in 4Q16. The telecom company’s adjusted EBITDA margin increased from ~35.5% in 4Q16 to ~35.7% in 4Q17, as the company concentrates on driving profitability by the cost and capital efficiencies across its business. Its management set a $10.0 billion cumulative cash savings target over the next four years.

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Verizon’s peer comparison of EBITDA margin in 4Q17

Sprint (S) and T-Mobile (TMUS) reported consolidated adjusted EBITDA margins of ~45.9% and ~35.0%, respectively, in 4Q17. AT&T’s (T) combined domestic wireless operations EBITDA margin was ~32.7% during the same quarter. Sprint is enjoying higher margins than its competitors due to significant cost reductions and higher equipment contribution.

In the next part, we’ll look at Verizon’s wireless segment EBITDA margin trend over the last few quarters.

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