Verizon's postpaid adds, service growth relatively healthy

As previously disclosed, Verizon (VZ +0.6%) had 1.4M retail postpaid net adds in Q2, up from 941K a year ago and increasing the total base to 98.6M. 1.15M tablet net adds contributed heavily to the gains. Phone net adds were 304K. On the other hand, retail prepaid subs fell by 14K to 6.04M.

Wireless service revenue growth slowed to 5.9% Y/Y from 7.5% in Q1, but is still healthier than AT&T/Sprint's. Equipment revenue (pressures margins) +22.2%, boosted by smartphone upgrade plan adoption. Wireless op. margin +10 bps Y/Y to 32.5%.

Retail postpaid churn was 0.94% vs. 1.07% in Q1 and 0.93% a year ago. Average revenue/account (ARPA) rose fractionally Q/Q and 4.7% Y/Y to $159.73.

Wireline revenue (31% of total) +0.3% Y/Y vs. -0.4% in Q1. Consumer revenue +5.3%, but small business -2.2%, global enterprise -1.9%, and global wholesale -5.5%. Wireline op. margin was just 2.7%, but that's up from 0.8% a year ago.

FiOS TV adds totaled 100K, and Internet adds139K. Those numbers are up from Q1 levels, but down from year-ago levels. Verizon now has 5.4M FiOS TV subs, and 6.3M FiOS Internet subs. Total FiOS revenue +14.4% Y/Y.

Verizon still expects 2014 capex of $16.5B-$17.5B vs. $16.6B in 2013.

Q1 results, PR

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Comments (3)
  • DoctoRx
    , contributor
    Comments (8124) | Send Message
    Strong and in-line. Stock relatively attractive IMHO. Big and boring is beautiful these days.
    22 Jul 2014, 10:34 AM Reply Like
  • mr_dinky_dot_bomb
    , contributor
    Comments (421) | Send Message
    It was much more attractive at $26, $36, and $45.90 on a post VZW transaction dip. Where have you been doc?
    22 Jul 2014, 11:13 AM Reply Like
  • jstratt
    , contributor
    Comments (4029) | Send Message
    I have been moving into VZ since the pre announcement of results. Here is why!


    4-5% revenue growth
    4.3% dividend
    11.38 trailing PE


    I thought that over the past couple years with a higher PE and more stagnant results VZ (or T) were not good investments.


    My guess is VZ PE increases do to growth prospects, EPS increases from the growth and combined with the dividend, a yield of 10%-20% is likely over the next year.
    22 Jul 2014, 12:34 PM Reply Like
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