Verizon Communications Inc. (NYSE, Nasdaq: VZ) closed 2019 with what its chairman called, “strong fourth-quarter results,” highlighted by earnings growth and the most fourth-quarter phone net additions in six years.
“Verizon delivered strong operational performance in the fourth quarter, highlighted by continued wireless customer growth in both Consumer and Business,” said Chairman/CEO Hans Vestberg. “In 2019, Verizon drove innovation in 5G, established a new operating structure and delivered solid financial results.
We entered 2020 with great momentum as we expand our network leadership and remain focused on the customer to provide a best-in-class experience. Our 5G footprint continues to grow as we lead this era of transformational change by building these next-generation networks the right way.”
Market analyst Jennifer Fritzsche of Wells Fargo Securities called it “mixed results,” although VZ provided a FY2020 outlook that came in “ahead of our expectations.” She said the carrier is already seeing the benefit from the fiber build, “with the significant majority of cell sites directly connected to Verizon fiber across its +60 market footprint.”
For fourth-quarter 2019, Verizon reported EPS of $1.23, compared with $0.47 in fourth-quarter 2018. On an adjusted basis (non-GAAP), fourth-quarter 2019 EPS, excluding special items, was $1.13, compared with adjusted EPS of $1.12 in fourth-quarter 2018.
- Total revenue growth of 3.5 percent year over year to $25.3 billion in fourth-quarter 2019, driven by a 2.7 percent increase in service revenue. For full-year 2019, Wireless service revenue grew 3.2 percent.
- 1.2 million retail postpaid net additions, including 790,000 phone net additions, the highest fourth-quarter phone net additions in six years; and 969,000 postpaid smartphone net additions, up 11.0 percent year over year.
- 1.4 million phone net additions in full-year 2019, compared to 1.1 million in full-year 2018.
- Total retail postpaid churn of 1.13 percent, and retail postpaid phone churn of 0.86 percent.
“In some ways, Verizon’s fourth quarter results are the mirror image of AT&T’s,” said Craig Moffett of MoffettNathanson. “Verizon’s revenues grew, while AT&T’s contracted. Verizon’s capital spending rose sharply, triggering a miss in FCF, while AT&T’s capex fell sharply, triggering a beat…at least on an as-reported basis,” he said.