![]() We have changed our Morningstar Uncertainty Rating to Medium from Low to reflect the volatility we think Verizon investors face relative to our global coverage. Read more about insert company’s moat rating. Alltel was strategically important, increasing the size of Verizon’s customer base by nearly 20%, placing it head and shoulders above even AT&T and T-Mobile in terms of scale while also adding strong geographic coverage in smaller towns and rural areas, extending the firm’s strong network reputation. ![]() The acquisition of Alltel in 2009 stands as the only major deal in firm history, accounting for most of the unit’s goodwill. Verizon Wireless has been built nearly entirely via internal growth since its founding in the late 1990s as a joint venture with Vodafone. Management doesn’t usually forecast free cash flow, but it said it expects at least $17 billion in 2023 versus $14 billion in 2022. Capital spending is also starting to decline, as forecast, boosting free cash flow to $8 billion in the year to date. While lower phone sales pressured reported revenue growth, lower associated costs enabled Verizon to increase adjusted EBITDA for the first time since 2021 (0.8% year over year). Lower phone sales: Only 3.3% of wireless customers upgraded their phones during the quarter, easily the lowest level of the smartphone era. We don’t expect liabilities associated with lead-sheathed cabling will overly tax Verizon’s ability to generate steady cash flow, but this matter creates additional uncertainty that is difficult to quantify. We believe Verizon will deliver consistent results, but growth will likely be very modest. Verizon is primarily focused on the wireless business, where it has taken steps to ensure it remains well positioned, building fiber deeper into major metro areas, acquiring a huge chunk of spectrum, and ramping up spending to put that spectrum to use. Despite the price increases, Verizon is attracting more new customers than a year ago, and the pace of customer defections increased only slightly year over year, leaving the firm with 8,000 net postpaid phone customer additions during the quarter.įocus on the wireless business: Wireless service revenue growth accelerated to 3.8% year over year from 3.0% last quarter. Stand-out metrics of Q2: Consumer wireless average revenue per postpaid account increased about 4% versus a year ago (excluding an accounting change 6% growth as reported) and 1.5% versus the prior quarter, primarily reflecting price increases with a small contribution from fixed-wireless broadband adoption. We suspect Verizon and its peers will ultimately remove some lead-sheathed cabling that otherwise would have remained in place. We still don’t expect Verizon will face significant lead liabilities, but we have increased our capital spending estimates modestly beyond this year. The firm didn’t provide much additional information or answer questions on the matter, saying it will share details as its own investigation proceeds. The company has disclosed that its copper-based networks span about 540,000 miles, with a “small” percentage containing lead. Lead-sheathed cabling: While Verizon delivered solid second-quarter results, investors remain focused on its exposure to lead-sheathed cabling. Morningstar Economic Moat Rating: Narrow.Key Morningstar Metrics for Verizon Communications Here’s Morningstar’s take on what to think of Verizon’s earnings and stock. Please see Verizon Business Mastercard® Credit Card Rewards Program Terms and Conditions for a complete list of terms.Verizon Communications VZ released its second-quarter earnings report on Tuesday, July 25, 2023, before the market open. (After the first credit card billing cycle following activation, you will earn 3%.) There's no limit on the amount of Verizon Business Dollars you can earn for eligible purchases. 2% back on eligible gas, electric vehicle charging and office supplies*įor example, if you make an eligible purchase of $100 at a Verizon store using your Verizon Business Mastercard within the first credit card billing cycle after account opening, you can earn 5% back in Verizon Business Dollars.3% back on Verizon purchases, like paying your Verizon bill or buying devices from Verizon, after your first billing cycle.5% back on Verizon purchases, like paying your Verizon bill or buying devices from Verizon, during your first billing cycle after account opening.After you apply and are approved for the Verizon Business Mastercard, you can earn Verizon Business Dollars on eligible business purchases as part of the Verizon Business Mastercard Rewards Program as follows:
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