VZ
Verizon Communications INC
NYSE
10-Q: Verizon Reports Mixed Q1 2024 Results Amidst Strategic Network Investments
Sentiment:
Quarterly Report
25 April 2024 9:00 AM
Verizon's first quarter of 2024 saw a slight increase in operating revenues, offset by higher expenses and a decrease in net income compared to the same period last year.
Worse than expected
Net income attributable to Verizon decreased compared to the same period last year, indicating worse than expected results.
Summary
- Verizon's operating revenues for Q1 2024 increased slightly to $32.981 billion, up from $32.912 billion in Q1 2023.
- Service revenues and other revenues increased to $27.620 billion, while wireless equipment revenues decreased to $5.361 billion.
- Operating expenses rose to $25.460 billion, compared to $25.328 billion in the same quarter last year.
- Net income attributable to Verizon decreased to $4.602 billion, or $1.09 per share, from $4.909 billion, or $1.17 per share, in Q1 2023.
- The company made capital expenditures of $4.4 billion during the quarter, focusing on network enhancements and fiber deployment.
- Verizon also made payments of $269 million for obligations related to clearing costs and accelerated clearing incentives for wireless licenses.
- The company completed tender offers for $1.981 billion of notes and repurchased $2.028 billion of various notes.
- Verizon issued $3.103 billion in new notes during the quarter.
- The company's asset-backed debt was $23.3 billion as of March 31, 2024.
Sentiment
Score: 5
Explanation: The document presents a mixed picture with some positive aspects like revenue growth and network investments, but also negative aspects like decreased net income and increased expenses. The sentiment is neutral to slightly negative.
Positives
- Service revenues saw an increase, indicating growth in core service offerings.
- The company continues to invest heavily in its network infrastructure, which is crucial for future growth.
- Verizon's free cash flow increased to $2.708 billion.
- The company is actively managing its debt through tender offers and new issuances.
Negatives
- Net income attributable to Verizon decreased compared to the same period last year.
- Wireless equipment revenues declined, suggesting a decrease in device sales.
- Selling, general and administrative expenses increased, impacting overall profitability.
- Interest expense increased due to higher average interest rates and debt balances.
Risks
- The company faces risks related to competition, technology changes, and economic conditions.
- Cyber attacks and natural disasters could disrupt operations and impact financial results.
- Changes in regulations and tax laws could also affect the company's performance.
- The company's high level of indebtedness poses a financial risk.
- Significant litigation could result in material expenses.
Future Outlook
Verizon expects capital expenditures for 2024 to be in the range of $17.0 billion to $17.5 billion and will continue to deploy C-Band spectrum across the continental U.S.
Management Comments
- Management is focused on enhancing and driving the monetization of networks, platforms and solutions.
- The company is focused on retaining and growing its high-quality customer base and further improving financial and operating performance.
- Management believes that C-Band spectrum, together with millimeter wave spectrum holdings and 4G LTE network and fiber infrastructure, will drive innovative products and services and fuel growth.
Industry Context
The report reflects the ongoing competition in the telecommunications industry, with companies investing heavily in 5G and fiber networks to meet growing customer demand for data and connectivity. Verizon's focus on network quality and strategic investments aligns with industry trends.
Comparison to Industry Standards
- Verizon's capital expenditure of $4.4 billion in Q1 2024 is significant, reflecting a continued commitment to network upgrades, which is a common trend among major telecommunications companies like AT&T and T-Mobile.
- The decrease in wireless equipment revenue is a trend seen across the industry as customers hold onto devices longer, impacting upgrade cycles.
- Verizon's focus on fiber deployment is comparable to other major players in the industry, as fiber is seen as a key technology for future growth.
- The company's debt management activities, including tender offers and new issuances, are typical for large telecommunications companies with significant capital needs.
- The reported net income decrease is a concern, but it is important to compare this to the performance of competitors like AT&T and T-Mobile to understand the broader industry context.
Stakeholder Impact
- Shareholders may be concerned about the decrease in net income and earnings per share.
- Employees may be affected by workforce changes and cost-cutting measures.
- Customers may benefit from continued network investments and service improvements.
- Suppliers and vendors may be impacted by changes in procurement and spending.
Next Steps
- The company will continue to deploy C-Band spectrum across the continental U.S.
- Verizon will continue to invest in its wireless networks, high-speed fiber and other advanced technologies.
- The company will continue to monitor and manage its debt obligations.
Legal Proceedings
- Verizon is involved in various litigation and regulatory proceedings at the state and federal level.
- The company is currently involved in approximately 30 federal district court actions alleging patent infringement.
Key Dates
- 2021-02-01: Start date for spectrum licenses.
- 2021-02-28: End date for spectrum licenses.
- 2021-11-23: Date of TracFone Wireless, Inc. acquisition.
- 2024-01-01: Start of various financial periods and debt obligations.
- 2024-01-31: Date of January 2024 ABS Notes.
- 2024-02-29: Date of pension annuitization commitment agreements.
- 2024-03-01: Start date for Secured Overnight Financial Rate (SOFR).
- 2024-03-06: Date of pension annuitization purchase closing.
- 2024-03-31: End of the quarterly period.
- 2024-04-01: Start date for spectrum licenses and scenario forecast.
- 2024-04-25: Date of asset-backed notes.
- 2024-12-31: End date for spectrum licenses.
- 2025-03-31: End date for scenario forecast.
Keywords
Verizon, telecommunications, wireless, 5G, fiber, network, revenue, profit, debt, capital expenditures, spectrum, EBITDA, financial results
VZ
Verizon Communications INC
NYSE
Sector: Communication Services
Filings with Classifications
Worse than expected
7 April 2025 4:06 PM
Proxy Statement
- The 2022-2024 PSU awards vested at 0% due to not meeting performance targets.
Worse than expected
11 March 2025 8:45 AM
8-K Filing
- Verizon expects lower postpaid phone net additions in Q1 2025 due to increased churn and flat to slightly down gross additions.
Worse than expected
12 February 2025 10:19 AM
Annual Results
- The Business segment experienced a revenue decrease of 2.0% due to declines in Enterprise and Public Sector revenues.
- Wireless equipment revenue in the Consumer segment decreased by 5.1%.
Better than expected
24 January 2025 6:55 AM
Quarterly Report
- The company's fourth-quarter results exceeded expectations with strong customer growth and revenue increases.
- The full-year EPS of $4.14 was significantly better than the $2.75 reported in the previous year.
- The free cash flow of $19.8 billion was better than the $18.7 billion reported in the previous year.
Worse than expected
25 October 2024 9:36 AM
Quarterly Report
- Net income attributable to Verizon decreased significantly year-over-year, indicating worse than expected profitability.
- The company incurred a substantial severance charge of $1.7 billion, negatively impacting the bottom line.
Better than expected
22 October 2024 9:14 AM
Strategic Update
- Verizon exceeded its fixed wireless subscriber target 15 months ahead of schedule, indicating better than expected performance.
Worse than expected
22 October 2024 7:00 AM
Quarterly Report
- Consolidated net income decreased year-over-year due to severance charges.
- Earnings per share decreased year-over-year.
- Adjusted EPS decreased year-over-year.
Worse than expected
12 September 2024 10:00 AM
Current Report
- The document details significant charges that will negatively impact the company's financial results for the third quarter of 2024.
Delay expected
9 September 2024 5:24 PM
Merger Announcement
- The closing of the Frontier deal is estimated to take some 18 months.
Better than expected
9 September 2024 5:23 PM
Merger Announcement
- The acquisition is expected to be immediately accretive to revenue and EBITDA, and accretive to EPS and cash flow within a year, indicating better than expected financial outcomes.
Delay expected
5 September 2024 5:18 PM
Merger Announcement
- The transaction is expected to close in approximately 18 months, subject to regulatory approvals and other conditions.
Delay expected
5 September 2024 5:17 PM
Merger Announcement
- The transaction is expected to close in approximately 18 months, subject to regulatory approvals and Frontier shareholder vote.
Better than expected
5 September 2024 6:56 AM
Merger Announcement
- The transaction is expected to be accretive to Verizon's revenue and Adjusted EBITDA growth rates upon closing.
- Verizon expects to realize at least $500 million in run-rate cost synergies by year three.
Delay expected
5 August 2024 4:10 PM
Debt Exchange Offer Announcement
- The early participation date was extended from August 2, 2024 to August 19, 2024.
Worse than expected
25 July 2024 9:52 AM
Quarterly Report
- Net income attributable to Verizon decreased slightly compared to the same period last year.
- Wireless equipment revenues decreased by 6.5% year-over-year, indicating a decline in device sales.
- The company's Business segment saw a decrease in operating revenues of 2.4%.
Worse than expected
25 April 2024 9:00 AM
Quarterly Report
- Net income attributable to Verizon decreased compared to the same period last year, indicating worse than expected results.
Worse than expected
23 January 2024 7:00 AM
Quarterly Report
- The company reported a net loss of $2.6 billion for the fourth quarter, compared to a net income of $6.7 billion in the same period of 2022, primarily due to a $7.8 billion pre-tax loss from special items.
- Full-year 2023 earnings per share (EPS) was $2.75, compared with $5.06 in 2022.
- Adjusted EPS for the fourth quarter was $1.08 compared to $1.19 in the prior year period.
Worse than expected
17 January 2024 8:00 AM
8-K Filing
- The company recorded a significant $5.8 billion goodwill impairment charge, indicating a substantial reduction in the perceived value of the Business unit.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.