Verizon Reports Solid Second Quarter Results

There was some concern by Wall Street analysts about how Verizon would fare against the stiffer competition that it has recently seen from T-Mobile and Sprint. It seems that Verizon’s second quarter 2015 results were slightly better than what the analysts expected.

Overall, Verizon posted earnings for the quarter, which ended on June 30, of $4.23 billion, representing $1.04 a share. This figure is up $1.01 a share, in the same quarter a year ago, and is what analysts expected Verizon to post this year.

Verizon’s chairman and CEO, Lowell McAdam made the following comments; “Verizon has delivered another quarter of strong financial and operational results, based on consistent network reliability and superior value that continues to attract new customers. In the second quarter, we again balanced quality Verizon Wireless connections growth with low churn and profitability.”

The second quarter results show total operating revenues at $32.2 billion, which represents a 2.4 percent increase as compared year-over-year. Unfortunately, sales fell slightly shorter than the estimated $32.4 billion.

According to Michael Stefanski, who is Verizon’s senior vice president, investor relations, this year the company is reporting the cost of equipment and the cost of service, which were previously combined as cost of service and sales. With that in mind, while service revenue was down by 2.2 percent, equipment revenue was up by 63 percent, giving Verizon’s wireless revenue an increase of 5.3 percent to $22.6 billion.

It appears that Verizon generated revenue growth mostly through its wireless and FiOS cable and Internet subscription services. The Internet of Things (IoT) was also a strong emerging revenue stream, along with continued strong cash flow from operating activities.

According to Verizon, new revenue streams from IoT and telematics totaled approximately $165 million in the second quarter 2015. Operating revenue from Verizon's global enterprise business dropped more than 6 percent to $3.22 billion, which is down from last year’s $3.44 billion.

Another area that experienced significant growth was the tablet sector. Verizon added 852,000 new tablet subscriptions, while its wireless business grew with 321,000 postpaid phone net additions and 588,000 net smartphone additions. However, these were both offset by a net decline of 266,000 basic phones.

Expectations for upcoming third quarter results are high. The end of June saw Verizon’s acquisition of AOL for $4.4 billion, which should expand the company’s mobile video offerings. Another change is the appointment of Adam Famularo to the position of global channel vice president for Verizon Enterprise Solutions. Verizon’s national partners can expect to see an increased focus on the channel this year.

Michael Wolfington, vice president of west partner sales for Kingcom, a Portland, Oregon-based national platinum partner and master agent for Verizon, said, "The changes that Verizon has made about a year ago within the channel have made a huge improvement in terms of our, and our partners' success. We have even greater expectations for the second half of this year."