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October 20, 2015

Third Quarter Results Show Growth in Earnings for Verizon

When Verizon announced its second quarter earnings results there was a bit of a surprise: the company reported a 2.97 percent increase.

Currently, Verizon is focusing on online content delivery, mobile video and online advertising for growth. The expectation, at the time, was that consistent market share gain combined with the rollout of FiOS Internet, increasing market penetration of 4G LTE services and higher sale of smart devices would also drive the company’s earnings in the third quarter.

It seems the expectations were on the mark. Total operating revenues for Verizon’s third-quarter 2015 results were $33.2 billion, representing a five percent increase as compared with last year’s third quarter results. Another positive factor is that Verizon is seeing new revenue streams from the Internet of Things (IoT). This quarter the total for IoT was approximately $175 million raising the total to about $495 million year to date.

Verizon’s CEO and chairman, Lowell McAdam believes that "Verizon continues to grow earnings by delivering network reliability and superior value that continues to attract new customers. Verizon Wireless posted another quarter of quality connections growth – even better than in the second quarter – while maintaining high customer loyalty and profitability. Meanwhile, FiOS customer growth also improved from the previous quarter. We expect future revenue growth from mobile over-the-top video, including digital advertising and the Internet of Things."

In addition to the new customers that McAdam’s mentions, there appears to be a lot of customer loyalty as the churn rate was very low. Verizon added 889,000 4G smartphones to its postpaid customer base and 5.6 million phones were activated on device installment plans this quarter.

This has resulted in wireless revenue going up 5.4 percent bringing in a total of $23 billion. However, while equipment revenue did increase from $2.5 billion to $4.3 billion year over year, service revenue was down 4.1 percent.

Overall, Verizon’s wireless and FiOS connections have created a customer loyalty base that led to third quarter 2015 earnings of 99 cents per share, or $1.04 per share on non-generally accepted accounting principles (GAAP), which represents a 10 cents increase year over year.




Edited by Kyle Piscioniere


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