pixel

URGENT ALERT: Please beware of fraudulent WhatsApp groups and other groups across Social Media pretending to be affiliated with Anchor and Anchor staff members. Do not engage with these malicious and fraudulent groups in any way. Please direct all queries to invest@anchorcapital.co.za.

Verizon: Strong earnings see share price reach c. 18-year high

Verizon Communications Inc. posted 3Q18 results on Tuesday (23 October), which beat expectations on the top and bottom line. Total operating revenue rose 2.8% YoY to $32.61bn vs $31.72bn posted in 3Q17, while diluted EPS rose to $1.22 compared with $0.98 recorded in 3Q17. Both quarterly profit and revenue were ahead of consensus estimates – Refinitiv consensus data had expected earnings of $1.19/share on $32.51bn in revenue. Net new phone subscribers were also ahead of expectations as customers took advantage of its subsidies for Apple’s latest iPhones late in the quarter under review. The company said it added a net 295,000 monthly phone subscribers during the quarter, easily beating the FactSet estimate of 161,000.

However, Verizon’s media and traditional phone businesses did not fare as well with revenue from Oath, its digital media subsidiary (which own websites including AOL and Yahoo), falling 7% YoY to $1.8bn in the quarter under review. Verizon said it does not expect Oath to reach its previous goal of $10bn in revenue by 2020, as it struggles to generate as much revenue as it had hoped from mobile advertising, to make up for shrinking desktop usage of its websites.

Verizon’s wireline business, which sells traditional phone service and its Fios video and internet products, recorded a revenue decline of 3.7% YoY to $7.4bn. It lost 63,000 Fios video subscribers during the quarter, more than the 18,000 it lost last year, as viewers continue to favour cheaper internet-based TV services, over paying for pricier cable packages, according to Reuters. It added 54,000 Fios internet customers, fewer than the 66,000 Verizon added a year earlier.

Verizon said it is on track to reach $10bn in cumulative cash savings by 2021.

Following the results, Verizon shares rose c. 4.1% to close at $57.21 on Tuesday – its highest level in c. 18 years.

OUR LATEST NEWS AND RESEARCH

INVESTING IN YOUR NEEDS

Submit your details and we’ll give you a call back to assist and advise you on your investment.

SUBSCRIBE TO OUR NEWSLETTERS

Subscribe to our newsletters to receive regular market commentary, research and updates from the Anchor team. Select between our Individual or Financial Advisor newsletters by selecting the relevant tab below.

WEBINAR | The Navigator – Anchor’s Strategy and Asset Allocation, 2Q24

Anchor CEO and Co-CIO Peter Armitage will host the webinar, provide an introduction to current global and local market conditions and give his thoughts on offshore equities. Together with Head of Fixed Income and Co-CIO Nolan Wapenaar, Pete will also discuss Anchor’s strategy and asset allocation for 2Q24, focusing on global equities and bonds. In addition, Fund Manager Liam Hechter will provide insights into local equities, highlighting some investment ideas; Global Equities Analyst James Bennet will discuss Ferrari and give an update on Tesla, and finally, Analyst Thomas Hendricks will participate in a Q&A with Peter, explaining the 10-year US Treasury to attendees.