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Shares of Verizon Communications Inc. pay dividends for each year, the last payment of dividends on shares VZ.F is 31/12/2019. Although the wireless giant posted positive results for the quarter, profit guidance for the coming year failed to impress the Street.
Quarterly figures
Verizon reported consolidated operating income of $35.3 billion for the fourth quarter of 2022, which was a 3.5% year-over-year increase and exceeded estimates. Revenue growth was driven by services and other revenue and equipment. GAAP net income rose 41% to $6.7 billion, or $1.56 per share. Adjusted EPS fell 10% YoY to $1.19 but was in line with expectations.
Business performance
In its quarterly conference call, Verizon said the industry continues to face macroeconomic uncertainty as inflation and high interest rates weigh on the broader economy. Even so, companies are seeing strong demand for these services because of the importance of mobility and broadband to consumers and businesses.
During the fourth quarter, wireless service revenue increased 5.9% from the year-ago period, driven by unlimited plan migration, the highest retail postpaid net additions in seven years, and price action. It also includes a full quarterly contribution from TracFone.
In 2023, Verizon will focus on generating additional synergies from the TracFone integration by moving TracFone customers on other carriers’ networks to the network. By the end of 2022, 81% of TracFone customers were on the Verizon network, up from 68% at the end of 2021.
Verizon’s Consumer segment generated revenue of $26.8 billion for the fourth quarter, which was up 4.2% YoY. Revenue growth was driven by a 6.1% increase in wireless service revenue. During the quarter, this segment reported 41,000 wireless retail postpaid phone network additions.
Revenue in the Business segment increased 1.2% to $7.9 billion in Q4, driven primarily by small and medium business mobility. Wireless service revenue grew 4.7% YoY in this segment. The Business segment reported 455,000 wireless retail postpaid net additions in the fourth quarter.
Verizon expects wireless mobility and national broadband to be the most important contributors to its growth for the next few years.
Outlook
Verizon’s outlook for fiscal year 2023 is not encouraging. The company has guided for adjusted EPS of $4.55-4.85 for the year. This compares to adjusted EPS of $5.18 for FY2022 and $5.50 for FY2021. Analysts projected EPS of $4.97.
Additionally, total wireless service revenue is expected to be 2.5-4.5% in FY2023, which compares to the 8.6% growth achieved in FY2022.
Click here to read the full transcript of Verizon’s Q4 2022 earnings conference call
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