2023-10-23 10:00:59 ET
Verizon ( NYSE: VZ ) is expected to post a 2.5% decline in quarterly revenue, when the U.S. telecom company reports its third quarter results on Tuesday before markets open.
A giant in the wireless market, Verizon is known for its faster networks and discounted bundles. However, fierce competition from fast-growing rivals including AT&T ( T ) and T-Mobile ( TMUS ) makes it tough for the company to attract customers, who are always hunting for cheaper plans and packages.
Customers also put off or delayed their device upgrades as rising prices left them with the option of spending less on discretionary items. Verizon in July said its wireless equipment revenue was nearly 21% lower than the prior year, as postpaid phone upgrade activity declined 34% versus the same period last year.
Wall Street expects New-York-based Verizon to post third-quarter earnings per share (EPS) of $1.18, implying a y-o-y fall of 10.6%. Revenue for the period is expected to be $33.34 billion.
Apart from wireless subscriber numbers, investors will focus on the company’s debt and cash flow - an important metric to help determine dividends, given the company scaled up spending on boosting its 5G network.
“Since interest rates have risen sharply, it will be interesting to see what effect this will have on earnings when debt is refinanced,” pointed out a recent Seeking Alpha analysis .
Last week, AT&T boosted its free cash flow guidance for the full-year amid stronger-than-expected third-quarter results.
Earlier in July, Verizon reported second-quarter results and maintained its full-year adjusted EBITDA and adjusted earnings forecasts, amid worries about lead cable liabilities.
The company said it expects adjusted EBITDA to be between $47 billion and $48.5 billion and adjusted earnings between $4.55 and $4.85 per share.
Over the last two years, VZ has beaten EPS estimates 88% of the time and has beaten revenue estimates 50% of the time.
Seeking Alpha analysts rated the stock as “buy”, while Wall Street analysts and Seeking Alpha’s Quant rating consider it a “hold”. The stock has fallen more than 20% so far this year.
Over the last three months, EPS estimates have seen three upward revisions compared to ten downward revisions. Revenue estimates have seen one upward revision versus nine downward moves
More on Verizon
- Verizon: No Worries About Refinancing Rates Affecting Dividends
- Verizon: A Potential Deep Value Opportunity Is Calling
- Verizon: No Floor Yet, Don't Chase Its Dividends To The Bottom
- Verizon adding 1,800 technicians to East Coast broadband push
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Verizon to see near 3% decline in revenue for Q3