Verizon Q4 Profit Misses Estimates; Revenues Down 5.6%

(RTTNews) - Verizon Communications Inc. (VZ) reported fourth-quarter adjusted earnings per share of $0.86 compared to $0.89, prior year. On average, 24 analysts polled by Thomson Reuters expected the company to report profit per share of $0.89 for the quarter. Analysts' estimates typically exclude special items. The company noted that its fourth-quarter adjusted EPS excluded 24 cents in net gains related to mark-to-market pension and OPEB adjustments and severance-related costs. Net income decreased year-over-year to $4.60 billion or $1.10 per share from $5.51 billion or $1.32 per share, prior year.

Fourth-quarter total consolidated operating revenues were $32.34 billion, a 5.6 percent decrease compared with fourth-quarter 2015. Analysts expected revenue of $32.08 billion for the quarter. Verizon reported 591,000 retail postpaid net additions in fourth-quarter 2016 which included 552,000 4G LTE smartphones. Total Wireless revenues were $23.4 billion in fourth-quarter 2016, a decline of 1.5 percent compared with fourth-quarter 2015, as more customers continued to choose unsubsidized device payment plans.

Total wireline revenues decreased 3.1 percent, to $7.8 billion, comparing fourth-quarter 2016 with fourth-quarter 2015. In fourth-quarter 2016, Verizon added a net of 68,000 Fios Internet connections and 21,000 Fios Video connections. Total Fios revenues grew 4.4 percent, to $2.9 billion.

IoT (Internet of Things) revenues, led by telematics, increased 21 percent on a comparable basis to fourth-quarter 2015, to $243 million. Verizon expects to sustain this trend in strong IoT revenue growth. Including acquisitions, IoT revenues increased more than 60 percent in fourth-quarter 2016.

Verizon reported full-year EPS of $3.21. Full-year 2016 revenues were nearly $126.0 billion, a 4.3 percent decline. Excluding revenues from since-divested local landline businesses and AOL, adjusted full-year total operating revenues on a comparable basis would have declined approximately 2.4 percent.

For full-year 2017, Verizon expects: consolidated revenues, on an organic basis, to be fairly consistent with 2016, with improvement in wireless service revenue and equipment revenue trends; also, full-year 2017 consolidated adjusted EPS trends to be similar to consolidated revenue trends.

Regarding the Yahoo acquisition, Verizon said the company continues to work with Yahoo to assess the impact of data breaches.