What Verizon’s Wireless Segment’s Earnings Margin Trend Indicates



Verizon’s Wireless segment’s EBITDA margin

In the previous part, we discussed Verizon’s (VZ) consolidated adjusted EBITDA[1. earnings before interest, tax, depreciation, and amortization] trend over the last few quarters. Let’s take a look at Verizon’s Wireless segment’s EBITDA margin.

Verizon’s Wireless segment reported $9.5 billion of EBITDA in 4Q17, an ~9.6% increase YoY (year-over-year). Additionally, the Wireless segment’s EBITDA margin was 39.8% in 4Q17, up from 36.9% in 4Q16.

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This improvement in the Wireless segment’s EBITDA margin was primarily driven by cost-saving initiatives and lower promotional activity in 4Q17 compared to 4Q16. Additionally, slightly better-than-expected wireless service revenues, as well as improved subscriber growth, benefited the Wireless segment’s EBITDA margin in 4Q17.

Subscriber growth

In 4Q17, T-Mobile (TMUS) and Sprint (S) reported 891,000 and 184,000 postpaid phone customer net additions, respectively. Verizon reported 431,000 postpaid phone customer net additions in 4Q17. AT&T (T) gained 329,000 postpaid phone net customers during the same period.

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


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