Verizon 4Q18 results a mixed bag

US wireless carrier, Verizon reported 4Q18 results on Tuesday (29 January) with net income coming in at $2.1bn, or $0.47/share, vs $18.8bn, or $4.57/share in 4Q17. Adjusted EPS climbed to $1.12 from $0.86 and was ahead of the Refinitiv consensus expectation of $1.09. Revenue rose 1% YoY to $34.3bn from $34bn in 4Q17 – below the Refinitiv consensus estimate of $34.4bn. Verizon had to adjust its EPS because it wrote down $4.6bn in 4Q18 for the value of its media division, Verizon Media (previously known as Oath) and it also took a $2.1bn charge following a voluntary redundancy programme. 

Verizon reported 1.22mnn retail postpaid net additions, up from 1.17mn in the year-ago period, while consensus analysts had been calling for 1.07mn postpaid net additions. It added 873,000 smartphone customers, but its total phone additions were 653,000, suggesting it lost a number of traditional phone customers.

Cnet reports that Verizon is in the midst of a transformation with the new CEO Hans Vestberg (the former head of Ericsson) “all-in” on its investment and focus on 5G and on improvements to its network. At the same time, Vestberg is also scaling back some of the projects initiated under his predecessor, Lowell McAdam, to invest in media projects. Verizon took a $4.6bn charge to write down a massive portion of the value of its media assets, and last Wednesday (23 January) announced plans to cut 7% of its work force in the media area (which includes properties such as Huffington Post, TechCrunch and AOL).

Looking ahead, Verizon said it expects low-single-digit consolidated revenue growth for the FY19. 

Verizon’s share price was down yesterday (29 January) – closing 3.3% lower on the day at $53.28/share.

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