Verizon beats by $0.01, beats on revs; reaffirms FY14 guidance (50.70)
Reports Q2 (Jun) adj. earnings of $0.91 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.90; revenues rose 5.7% year/year to $31.48 bln vs the $31.09 bln consensus.
Co reaffirms guidance for FY14, sees FY14 revs +4% to ~$125.4 bln vs. $125.41 bln Capital IQ Consensus, adj. consolidated EBITDA margin expansion in 2014, with positive contributions to profitable growth from both wireless and wireline.
In Q2, Verizon Wireless delivered strong growth in retail postpaid net connections and revenues, co-record tablet additions, an increase in smartphone penetration, and continued high segment EBITDA margin on service revenues (non-GAAP).
Co reaffirms guidance for FY14, sees FY14 revs +4% to ~$125.4 bln vs. $125.41 bln Capital IQ Consensus, adj. consolidated EBITDA margin expansion in 2014, with positive contributions to profitable growth from both wireless and wireline.
- Verizon continues to target 2014 investments in the range of $16.5 billion to $17 billion, with a decrease in capital spending as a%age of total revenues for the full year.
In Q2, Verizon Wireless delivered strong growth in retail postpaid net connections and revenues, co-record tablet additions, an increase in smartphone penetration, and continued high segment EBITDA margin on service revenues (non-GAAP).
- Wireless Financial Highlights
- Total revenues were $21.5 billion in second-quarter 2014, up 7.5% year over year. Service revenues in the quarter totaled $18.1 billion, up 5.9% year over year. Retail service revenues grew 5.3% year over year, to $17.3 billion. Retail postpaid ARPA (average revenue per account) increased 4.7% over second-quarter 2013, to $159.73 per month. In second-quarter 2014, wireless operating income margin was 32.5% and segment EBITDA margin on service revenues was 50.3%. This compares with 32.4% and 49.8%, respectively, in second-quarter 2013.
- Wireless Operational Highlights
- Verizon Wireless added 1.4 million retail net connections, all of which were postpaid, in the second quarter. These additions exclude acquisitions and adjustments. At the end of the second quarter, the company had 104.6 million retail connections. This includes 98.6 million retail postpaid connections, a 4.6% increase year over year. Verizon Wireless had 35.2 million retail postpaid accounts at the end of the second quarter, up 0.7% over second-quarter 2013, and 2.80 connections per account, up 3.7% year over year. During second-quarter 2014, the company added 304,000 postpaid phone net additions and 1.15 million postpaid tablets. Verizon's wireline segment reported continued strong results for consumer services, where year-over-year quarterly revenues now have grown by more than 4% for eight consecutive quarters.
- Wireline:
- In Q2, consumer revenues were $3.9 billion, up 5.3% compared with second-quarter 2013, with FiOS revenues representing 75% of the total. Consumer ARPU for wireline services increased to $122.57 in second-quarter 2014, up 11.0% compared with second-quarter 2013. Total FiOS revenues grew 14.4%, to $3.1 billion, comparing second-quarter 2014 with second-quarter 2013.
- Verizon added 139,000 net new FiOS Internet connections and 100,000 net new FiOS Video connections. Verizon had totals of 6.3 million FiOS Internet and 5.4 million FiOS Video connections at the end of the second quarter, representing year-over-year increases of 9.3% and 7.6%, respectively.