Verizon Earnings: What to Watch
April 18 2017 - 12:02PM
Dow Jones News
By Ryan Knutson
Verizon Communications Inc., the U.S.'s largest wireless carrier
by subscribers, is scheduled to report first-quarter results before
the market opens Thursday. Here's what you need to know:
EARNINGS FORECAST: Analysts are expecting earnings of 96 cents a
share, according to Thomson Reuters, down from $1.06 a share in the
year-ago period.
REVENUE FORECAST: Analysts estimate revenue of $30.5 billion, a
5% drop from a year ago.
WHAT TO WATCH:
-- UNLIMITED PLAN: Verizon surprised the wireless world in
February when it started selling an unlimited data plan. The
carrier hadn't offered unlimited data since 2011, saying such plans
didn't make economic sense, but it was forced to respond to
aggressive unlimited offers from Sprint Corp. and T-Mobile US Inc.
Now the question is whether Verizon's offer was enough to turn
things around, and how much damage its telecom rivals
inflicted.
-- NETWORK: With more than 114 million wireless customers,
Verizon's network already carries significant traffic, and the
burden is sure to increase as more people sign up for unlimited
plans. In addition, Verizon sat out the latest U.S. government
auction for wireless airwaves. The company will likely face
questions about how it plans to accommodate growing data traffic.
Will the construction of small cells, which target coverage in
dense areas, be enough? How long does Verizon have before it must
acquire fresh spectrum? Will it consider buying airwaves from
companies that own spectrum, such as Dish Network Corp. or Ligardo
Networks LLC?
-- DIGITAL MEDIA: Verizon's Yahoo acquisition is expected to
close within weeks, and the beleaguered internet pioneer will join
AOL under Verizon's Oath unit. Although Oath will generate billions
in annual revenue, it is still a drop in the bucket for Verizon,
which earned $126 billion in revenue in 2016. To move the needle,
Oath will need bigger hits than go90, the mobile video app Verizon
launched in 2015. That app, which recently underwent another
overhaul, has yet to gain meaningful traction.
-- REVENUE: Many of the early beneficiaries of Verizon's new
unlimited data plan were customers previously paying hundreds of
dollars a month for huge data allowances. Did enough low-end data
users upgrade to pricier plans to offset those whose bills shrunk?
Verizon has suffered three straight quarters of year-over-year
revenue declines, and analysts expect revenue dropped again in the
first quarter.
Write to Ryan Knutson at ryan.knutson@wsj.com
(END) Dow Jones Newswires
April 18, 2017 11:47 ET (15:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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