Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported second-quarter results Friday highlighted by increased cash flow and strong momentum heading into the second half of the year.
“Through extraordinary circumstances, Verizon delivered a strong operational performance in the second quarter,” said Chairman and CEO Hans Vestberg. “We remain focused on our strategic direction as a technology leader, quickly adapting to the new environment and providing our customers with reliable and vital connections and technology services, while working to keep our employees safe and accelerating our 5G network deployment. We have embraced, engaged in and responded to important social movements happening throughout the world, and will continue to be at the forefront of initiatives that move the world forward for everyone. We are proud of what we have done, and continue to do, for our customers, shareholders, employees, and society.”
Capital expenditures in first-half 2020 were $9.9 billion, as the report stated, “supporting the capacity for traffic growth across Verizon’s networks and the deployment of additional fiber and cell sites to expand the company’s 5G Ultra Wideband rollout.”
The company expects total wireless service revenue growth for third-quarter 2020 of -1 percent to flat year over year. The company also recognized an aggregate tax benefit of $156 million in connection with a series of legal entity restructurings related to an internal reorganization, which resulted in an approximately 4 percent benefit to second-quarter 2020 EPS and adjusted EPS.
“To be sure, Verizon’s results in Q2 were markedly better than AT&T’s,” said Craig Moffett of MoffettNathanson, “with solid subscriber results and much better churn. But Verizon’s over-reliance on millimeter wave spectrum and their almost willful neglect of their weak position in mid-band spectrum have become impossible to ignore.”
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