The average estimate of 16 analysts surveyed by Zacks Investment Research was for earnings of $1.01 per share.
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In the first quarter, the company had added 90,000 new pay TV customers.
As mentioned, Verizon added significantly more tablets than smartphones. These totals do not include wholesale or Internet of Things connections. More people are also opting for lower-priced service plans. Finally, Zacks upgraded shares of Towerstream Co. from a sell rating to a hold rating.
Telecommunications giant Verizon Communications Tuesday said it grew both revenue and profits in the second quarter thanks in large part to its wireless and tablet sales. That’s an increase from 39% the previous quarter, and just 18% in the year-ago period. This year’s cash flow has included a non-recurring $2.4bn related to the monetization of tower assets in the first quarter. Combined billings increased 2.3%.
Shares of Verizon moved a bit higher before going negative in premarket trading following the announcement. Verizon’s growing portfolio is also creating an ecosystem which is helping the operator retain its postpaid phone subscriber base without relying on aggressive pricing tactics. The Wireless segment includes the Cellco Partnership doing business as Verizon Wireless.
Verizon’s wireline revenue declined 2.2 percent year-to-year despite FiOS consumer revenue rising 9.8 percent year-to-year in the quarter. Branded prepaid net additions surged 75% year-over-year, with T-Mobile U.S. posting 178,000 net additions during the last quarter. Verizon added net 26,000 FiOS video subscribers in the three months ended June 30, and a net 72,000 subscribers to FiOS Internet service.
Nonetheless, Verizon continues to improve its penetration of its existing addressable homes, now reaching 41.4% of potential Internet homes and 35.7% of potential video homes. Most of the connections were added through retail postpaid, which increased by 5.3%. While Verizon has effectively managed to fend off competition thus far by focusing on higher quality customers, the recent momentum that the bottom two carriers have been seeing does pose a threat to the company. One-third of gross video connections were made using the Custom TV offer.
“Notwithstanding this pressure on average revenue per user, Verizon’s wireless margins remain the envy of the industry”, Moffett said. The company has a market cap of $191.57 billion and a price-to-earnings ratio of 19.72.
New revenue streams from IoT and telematics totalled approximately $165m in second-quarter 2015 and about $320m year to date.
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During the quarter Verizon announced and completed its $4.4 billion deal to buy AOL, which it did primarily for advertising technology.
