Verizon reports strong 3Q revenue growth momentum
20 Octobre 2021 - 1:30PM
Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported
third-quarter earnings today highlighted by revenue and customer
growth as more than one in four Consumer wireless phone customers
now have a 5G-capable device. "We had a strong third quarter,
delivering on our strategy and growing in multiple areas," said
Verizon Chairman and CEO Hans Vestberg. "Our disciplined strategy
execution demonstrated growth in 5G adoption, broadband subscribers
and business applications. We are increasing our 2021 guidance, and
we continue to expand our 4G LTE and 5G network leadership. We
fully expect to have a strong finish to the year as we accelerate
deployment of 5G to our customers across the country."For
third-quarter 2021, Verizon reported EPS of $1.55, compared with
$1.05 in third-quarter 2020, a 47.6 percent increase year over
year. On an adjusted basis*, third-quarter 2021 EPS, excluding
special items, was $1.41, compared with adjusted EPS of $1.25 in
third-quarter 2020, a 12.8 percent increase year over year.
Third-quarter 2021 EPS included a net pre-tax gain on the sale of
Verizon Media to Apollo funds of $706 million, and a net pre-tax
charge of approximately $247 million, which included a net charge
of $144 million related to a mark-to-market adjustment for pension
liabilities, and $103 million related to a severance charge for
voluntary separations under existing plans. Third-quarter 2021
results also included two months of Verizon Media, as the sale
closed on September 1.“Verizon reported another quarter of strong
financial and operating performance,” said Verizon Chief Financial
Officer Matt Ellis. "We are seeing strong demand for connectivity
across our Consumer and Business segments as our Mix and Match and
Business Unlimited value propositions, network quality and unique
partnerships are resonating with both new and existing customers.
We grew revenue in the quarter, achieved solid cash flow, completed
the sale of Verizon Media and increased the dividend for a 15th
consecutive year."
Consolidated results
- Total consolidated operating
revenues in third-quarter 2021 were $32.9 billion, up 4.3 percent
from third-quarter 2020. These results included two months of
Verizon Media revenue of approximately $1.4 billion on a segment
basis. Excluding Verizon Media*, total consolidated operating
revenues increased 5.5 percent.
- Year-to-date cash flow from
operations totaled $31.2 billion, a decrease from $32.5 billion
year over year. This decrease was primarily driven by lower cash
taxes from a one-time benefit in 2020, as well as higher working
capital requirements in 2021 due to greater volumes.
- Capital expenditures year-to-date
were $13.9 billion. Capital expenditures continue to support the
growth in traffic on the company's 4G LTE network and the continued
expansion of the company's 5G Ultra Wideband and 5G Nationwide
networks. Capital expenditures related to C-Band were more than $1
billion year-to-date.
- The company ended third-quarter
2021 with free cash flow* of $17.3 billion.
- Verizon's unsecured debt balance
increased year over year by $36.1 billion to $141.6 billion at the
end of third-quarter 2021, remaining relatively flat sequentially
from the end of second-quarter 2021. The company’s net unsecured
debt* as of the end of third-quarter 2021 increased by $35.1
billion year over year to $131.6 billion, but improved by $5.2
billion sequentially from the end of second-quarter 2021, with its
net unsecured debt to adjusted EBITDA ratio* at approximately 2.7
times. Verizon's cash balance of $9.9 billion at the end of
third-quarter 2021 included the proceeds associated with the
company's sale of Verizon Media.
Consumer results
- Consumer built momentum throughout
third-quarter 2021 highlighted by its Mix and Match pricing and
unique partnerships. Consumer continued to expand its leadership in
5G adoption, ending third-quarter 2021 with more than 25 percent of
wireless phone customers having 5G-capable devices.
- Total Verizon Consumer revenues
were $23.3 billion, an increase of 7.3 percent year over year. This
increase was primarily driven by strong demand for connectivity and
products.
- Consumer wireless service revenues
were $14.0 billion in third-quarter 2021, a 4.0 percent increase
year over year. Consumer grew phone net additions and continued to
execute on its unlimited and premium unlimited migration
strategy.
- Consumer wireless retail postpaid
churn was 0.84 percent in third-quarter 2021, and wireless retail
postpaid phone churn was 0.67 percent.
- In third-quarter 2021, Consumer
reported 423,000 wireless retail postpaid net additions. This
consisted of 267,000 phone net additions and 223,000 other
connected device net additions, offset by 67,000 tablet net losses.
Consumer's phone net additions in third-quarter 2021 were more than
Consumer's phone net additions in both third-quarter 2020 and
third-quarter 2019.
- The quality and reliability of the
company's Fios service continued to drive strong demand as Consumer
reported 98,000 Fios Internet net additions in third-quarter 2021.
Consumer Fios revenues were $2.9 billion in third-quarter 2021, an
increase of 4.3 percent year over year. Consumer reported 68,000
Fios Video net losses in third-quarter 2021.
- In third-quarter 2021, Consumer
segment operating income was $7.6 billion, an increase of 2.1
percent year over year, and segment operating income margin was
32.5 percent, a decrease from 34.2 percent in third-quarter 2020.
Segment EBITDA* totaled $10.5 billion in third-quarter 2021, an
increase of 2.0 percent from third-quarter 2020, driven by
high-quality service and other revenue gains from multiple growth
vectors. Segment EBITDA margin* was 45.0 percent in third-quarter
2021, a decrease from 47.4 percent in third-quarter 2020.
Business results
- In third-quarter 2021, Business
continued to see strong demand for wireless services across
multiple verticals. Strong Small and Medium Business momentum, the
best performing quarter year-to-date for wireless subscriber growth
in Global Enterprise and an increase in activity with enterprises
in the private wireless and MEC space led the quarter.
- Total Verizon Business revenues
were $7.7 billion, down 0.8 percent year over year. Wireless
revenue growth continues to offset ongoing legacy wireline
declines.
- Business wireless service revenues
were $3.1 billion in third-quarter 2021, a 3.6 percent increase
year over year.
- Business wireless retail postpaid
churn was 1.29 percent in third-quarter 2021, and wireless retail
postpaid phone churn was 1.04 percent.
- Business reported 276,000 wireless
retail postpaid net additions in third-quarter 2021, including
162,000 phone net additions.
- In third-quarter 2021, Business
segment operating income was $886 million, a decrease of 4.0
percent year over year, and segment operating income margin was
11.5 percent, a decrease from 11.9 percent in third-quarter 2020.
Segment EBITDA* totaled $1.9 billion in third-quarter 2021, a
decrease of 2.4 percent from third-quarter 2020. Segment EBITDA
margin* was 24.8 percent, a decrease from 25.2 percent in
third-quarter 2020, driven by wireline pressure.
Outlook and guidance
Verizon is updating financial guidance for full-year 2021.
- The company now expects total
wireless service revenue growth of around 4 percent. This update is
at the higher end of the prior guidance of 3.5 percent to 4
percent.
- The company now expects adjusted
EPS* of $5.35 to $5.40, an update from prior guidance of $5.25 to
$5.35.
Additionally, Verizon continues to expect the following results
for full-year 2021:
- Adjusted effective income tax rate*
in the range of 23 percent to 25 percent.
- Capital spending to be in the range
of $17.5 billion to $18.5 billion, including the further expansion
of 5G mmWave in new and existing markets, the densification of the
4G LTE wireless network to manage future traffic demands and the
continued deployment of the company's fiber infrastructure. The
company notes that its assumption for this guidance is dependent
upon no material changes in the current state of the company's
supply chain. Expenditures related to the deployment of the
company's C-Band 5G network will be in addition to this amount, and
the company previously announced an incremental $10 billion of
capital expenditures from 2021 to 2023, of which $2 billion to $3
billion is expected in 2021.
*Non-GAAP financial measure. See the accompanying schedules and
www.verizon.com/about/investors for reconciliations to generally
accepted accounting principles (GAAP) for non-GAAP financial
measures cited in this document.
Verizon Communications Inc. (NYSE, Nasdaq: VZ) was formed on
June 30, 2000 and is one of the world’s leading providers of
technology and communications services. Headquartered in New York
City and with a presence around the world, Verizon generated
revenues of $128.3 billion in 2020. The company offers data, video
and voice services and solutions on its award-winning networks and
platforms, delivering on customers’ demand for mobility, reliable
network connectivity, security and control.
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Forward-looking statementsIn this communication
we have made forward-looking statements. These statements are based
on our estimates and assumptions and are subject to risks and
uncertainties. Forward-looking statements include the information
concerning our possible or assumed future results of operations.
Forward-looking statements also include those preceded or followed
by the words “anticipates,” “believes,” “estimates,” “expects,”
“hopes,” “forecasts,” “plans” or similar expressions. For those
statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. We undertake no obligation to revise
or publicly release the results of any revision to these
forward-looking statements, except as required by law. Given these
risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. The following
important factors, along with those discussed in our filings with
the Securities and Exchange Commission (the “SEC”), could affect
future results and could cause those results to differ materially
from those expressed in the forward-looking statements: cyber
attacks impacting our networks or systems and any resulting
financial or reputational impact; natural disasters, terrorist
attacks or acts of war or significant litigation and any resulting
financial or reputational impact; the impact of the COVID-19
pandemic on our operations, our employees and the ways in which our
customers use our networks and other products and services;
disruption of our key suppliers’ or vendors' provisioning of
products or services, including as a result of the COVID-19
pandemic; material adverse changes in labor matters and any
resulting financial or operational impact; the effects of
competition in the markets in which we operate; failure to take
advantage of developments in technology and address changes in
consumer demand; performance issues or delays in the deployment of
our 5G network resulting in significant costs or a reduction in the
anticipated benefits of the enhancement to our networks; the
inability to implement our business strategy; adverse conditions in
the U.S. and international economies; changes in the regulatory
environment in which we operate, including any increase in
restrictions on our ability to operate our networks or businesses;
our high level of indebtedness; an adverse change in the ratings
afforded our debt securities by nationally accredited ratings
organizations or adverse conditions in the credit markets affecting
the cost, including interest rates, and/or availability of further
financing; significant increases in benefit plan costs or lower
investment returns on plan assets; changes in tax laws or treaties,
or in their interpretation; and changes in accounting assumptions
that regulatory agencies, including the SEC, may require or that
result from changes in the accounting rules or their application,
which could result in an impact on earnings.
Media contacts: Kim Ancin 908.559.3227
kimberly.ancin@verizon.com
Eric Wilkens 908.559.3063
eric.wilkens@verizon.com
Verizon Communications (NYSE:VZ)
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