Verizon at the tech conference
Verizon (VZ), the largest US wireless service provider, reported stronger-than-expected 4Q17 financial results. Its wireless business rebounded to show another strong quarter of customer growth in a highly competitive environment. This performance was partially offset by its weaker wireline business performance.
Verizon reported adjusted EPS (earnings per share) of $0.86 in 4Q17, which were flat YoY (year-over-year). However, the company’s earnings were ~2.3% lower than what Wall Street analysts had expected.
During the Morgan Stanley Technology, Media & Telecom Conference held on February 27, 2018, Matt Ellis, Verizon’s chief financial officer, talked about Verizon’s top priorities for 2018. Ellis stated that the company’s first priority is executing on fundamentals, which means maintaining a leadership position when it comes to network performance as well as supporting customer relationships.
The company’s second priority is delivering on financial performances such as revenue growth in 2018, completing the rollout of its zero-based methodology, and maintaining an efficient capital allocation model. The company’s final priority is positioning itself for growth going forward—not just in 2018 but for the next five-plus years.
Wall Street analysts expect Verizon’s adjusted EPS to rise ~21.7% YoY to reach ~$4.55 in 2018 compared to $3.74 in 2017.
Peer EPS comparison for 4Q17
In 4Q17, AT&T’s (T) adjusted EPS rose ~18.2% YoY to reach $0.78, whereas T-Mobile’s (TMUS) adjusted EPS rose ~35.6% YoY to reach $0.61. Meanwhile, Sprint’s (S) EPS improved from -$0.12 in fiscal 3Q16 to $1.76 in fiscal 3Q17 (the quarter that ended in December 2017), but $7.1 billion of its $7.2 billion net income in fiscal 3Q17 was a noncash gain related to US tax reform.