Published on March 27th, 2015 | by itadmin

Quarter Report Preview of Verizon Communications Inc. (NYSE:VZ)

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Verizon Communications Inc. (NYSE:VZ) is expected to publish its financial reports for the quarter four as well as the full fiscal 2014 on 22nd January. While Verizon Communications Inc. (NYSE:VZ) has been known to surpass all the targets set this year, the company may not meet the estimates because of competitive prices and low margins of the industry.

Verizon Communications Inc. (NYSE:VZ) has remained out of this price war, but for its fourth quarter, the company aggressively marketed its products to widen its customer base. This entails that earnings of the company will have decreased. As per Street analysts, EPS of Verizon Communications Inc. (NYSE:VZ) is expected to be $0.73 for the fourth quarter, accounting for 11.1% YoY increase. The revenue figure is estimated to reach $32.66 billion which marks a YoY increase of 5.1%.

Verizon Communications Inc. (NYSE:VZ) was not able to meet the targeted revenue and EPS during the last quarter. The company had an estimated EPS of $0.89, and it didn’t meet the target by $0.01. Verizon Communications Inc. (NYSE:VZ) also missed the revenue target by $0.01 billion. However, stock of the company increased by 2.6%.

For the year of 2014, analysts have expected that Verizon Communications Inc. (NYSE:VZ) will report EPS to be $3.4 with a YoY increase of 19.9%. The revenues for the company are expected to grow by 5%, making it $126.55 billion.

The wireless division of Verizon Communications Inc. (NYSE:VZ) makes up for 70% of its revenues. This division is estimated to generate $22.6 billion in revenue for the fourth quarter. With the launch of new iPhones, Verizon Communications Inc. (NYSE:VZ) is expected to get 1.7 million more postpaid networks.

Verizon Communications Inc. (NYSE:VZ) has expected that with the marketing activities of T-Mobile US Inc. and Sprint Corporation, the company itself will be able to increase postpaid prices. The analysts have expected that the postpaid churn for the fourth quarter will be 1.04%. ARPA is estimated to increase for Verizon Communications Inc. (NYSE:VZ) due to an increase in tablets by 1.3 million. As per Citi analysts, ARPA will be $159.25.

The marketing strategy of the company is expected to have a 41.7% reduction in its EBITDA margins, while the Edge is estimated to increase by 24%.

On the other hand, the wireless division of Verizon Communications Inc. (NYSE:VZ) is estimated to generate low revenues of $9.5 billion which marks a 3.15 YoY decrease. On the other hand, for ailing sector of Verizon Communications Inc. (NYSE:VZ), the FiOS is expected to have 2.1% YoY increase. The company is still expecting EBITDA of wireless segment for the whole to expand.

As per the analysts from Citi, the competition within the wireless industry is expected to continue, and this will entail pressurizing Verizon Communications Inc. (NYSE:VZ) for price as well as margin reductions. Problems like not being able to reduce the wireless costs and on the other hand, not being able to get the wireless revenue better either is going to necessarily have a negative effect on company’s financial standing. EPS could get lowered.


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