Verizon Communications Surpasses Profit Despite Decline in Sales, Boosts Shares
Verizon Communications (VZ) announced its earnings for the first quarter of 2024, and although its revenues fell short of expectations, its adjusted earnings per share (EPS) beat financial analysts’ estimates. Following the announcement of these financial results, Verizon’s share price rose as much as 3.2% before the market opened, reflecting investors’ positive reaction to higher-than-expected earnings.
For the first quarter, Verizon reported adjusted EPS of $1.15, which was $0.03 more than financial analysts’ estimate of $1.12. The company’s revenue for the quarter was $33 billion, slightly below the expected $33.23 billion. Compared to the prior-year first quarter, Verizon’s total operating revenue increased slightly by 0.2%, while adjusted EPS decreased from $1.20 in the first quarter of 2023.
Revenue from Verizon’s wireless services increased 3.3% year over year to $19.5 billion. This increase was driven by the company’s pricing strategies and growth in the number of fixed wireless customers. Although there was a decline in revenue from wireless equipment due to fewer upgrades, the company’s overall financial health was supported by an increase in services revenue.
Verizon’s full-year 2024 financial forecast calls for adjusted EPS of $4.50 to $4.70. The midpoint of that range, $4.60, is slightly higher than analysts’ average estimate of $4.57. This projection reflects the company’s confidence in its business plan and future financial results.
Commenting on the financial results, Verizon Chairman and Chief Executive Officer Hans Vestberg said: “The strong results demonstrate the effective performance of our team. Our achievements in the first quarter position us for a successful 2024.” He underlined that the company’s financial performance is in line with its targets and the significant increase in the number of fixed wireless customers.
Beyond the better-than-expected EPS, Verizon posted net income of $4.7 billion for the first quarter; This figure decreased compared to $5.0 billion in the same quarter of the previous year. The company also noted that its consolidated adjusted EBITDA increased from $11.9 billion in the first quarter of 2023 to $12.1 billion in this quarter.
The market’s positive reaction, evidenced by the rise in stock price before the market opened, reflects investors’ approval of Verizon’s success in beating earnings estimates despite a small shortfall in revenue. The company’s strong revenue from wireless services and strategic pricing were instrumental in its financial success and provided a solid foundation for the remainder of the year.