Verizon's wireless business shows strain in Q1, but unlimited plan stems defections

Gladys Abbott
April 21, 2017

Verizon Communications's revenue for the quarter was down 5.6% on a year-over-year basis.

The company has also explored bigger transactions, including with Charter Communications Inc., The Wall Street Journal has reported, though executives have recently signaled the two sides are far apart.

More Verizon customers used the unlimited plan to reduce their bills - moving from expensive data plans to the cheaper unlimited one - than customers chose to pay up.

For what it's worth, Verizon says that Verizon Unlimited helped mitigate some of the customer losses in the first quarter; it ended up losing 307,000 net postpaid customers, but would have lost 398,000 if it weren't for Verizon Unlimited. After the launch, it could 109,000 retail postpaid connections. The lowest price target is presently $46.41 and the analyst with the most aggressive opinion sees the stock going to $61. That offer hit financials: Verizon had a 5.1% decline in revenue in its wireless business, to $20.9 billion.

72 percent of postpaid phone customers were on a non-subsidized service plan. The carrier added 167k postpaid phone subscribers in Q4'16. During the first quarter, the amount of traffic on Verizon's LTE network rose 57% year-over-year. It operates in the healthcare sector and offers services and products for dialysis, hospitals and outpatient medical care. The stock is showing its Operating Margin of 21.5 percent.

As previously announced, Verizon plans to launch 11 pre-commercial 5G fixed wireless pilots during second-quarter 2017.

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Wireline revenues were $7.9bn, down 0.6 per cent from Q1 2016. This supported revenue growth of 0.7 percent in consumer markets and 2.3 percent in business markets.

Verizon FiOS added 35,000 Internet subscribers and lost 13,000 video subscribers in the quarter.

For the first quarter, Verizon posted a profit of $3.55 billion, or 85 cents a share.

The Company has 4080.00 million shares outstanding and 4078.65 million shares were floated in market. "The coming quarters will probably look a lot different than the past quarters". Stock has got OUTPERFORM rating from 12 analysts of Thomson Reuters, 9 analysts given HOLD rating to the stock and 1 given UNDERPERFORM rating.

On 19 April 2017, Visa Inc. News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Verizon Communications Inc. with MarketBeat.com's FREE daily email newsletter.

That mid-quarter turnaround notwithstanding, analysts and investors generally viewed Verizon's first quarter as a disappointment, and shares sank more than 2% after earnings were released. The stock has a 50 day moving average of $49.40 and a 200 day moving average of $50.00. Verizon reports average revenue per account (ARPA), which includes all lines in an account, and as such isn't directly comparable with T-Mobile's ARPU metrics; Verizon ARPA was $136.98 last quarter (down 6%). Drexel Hamilton lowered Verizon Communications from a "buy" rating to a "hold" rating in a research report on Friday, January 6th. The company now has an average rating of "Hold" and an average target price of $54.23. Vetr downgraded shares of Verizon Communications from a "buy" rating to a "hold" rating and set a $52.38 price target on the stock.in a report on Monday, January 2nd. Hedeker Wealth Limited Liability Company stated it has 45,345 shares or 1.99% of all its holdings.

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