Verizon raises outlook as quarterly free cash flow reaches 7.8 billion dollars
Verizon reported third-quarter free cash flow of 7.8 billion dollars, up 12.1 percent, and raised its annual outlook. Revenue rose 1.5 percent to 34.3 billion dollars, while adjusted earnings reached 1.31 dollars per share. The telecommunications company added 406,000 postpaid phone subscribers on a net basis and reported lower spending on customer promotions.
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Cash generation rises faster than revenue
Verizon reported third-quarter adjusted earnings of 1.31 dollars per share, compared with 1.21 dollars a year earlier. The results cover the quarter ended in September. The US telecommunications company also raised its annual outlook after reporting stronger cash generation and growth in its mobile and broadband services.[1], [2]
Operating cash flow rose 2.2 percent year on year to 11.5 billion dollars. Free cash flow increased 12.1 percent to 7.8 billion dollars. During the first nine months, the corresponding amounts were 29.9 billion dollars and 18 billion dollars, while capital expenditure totalled 11.9 billion dollars over that longer period. The nine-month comparison covers January through September of the year.[1]
Service growth accompanies lower promotion spending
Quarterly revenue increased 1.5 percent to 34.3 billion dollars. Mobility and broadband service revenue rose 2.9 percent to 23.5 billion dollars, while equipment revenue fell 9 percent alongside fewer device upgrades and lower subsidies. Net income increased 5.2 percent to 5.3 billion dollars; diluted earnings were 1.25 dollars per share.[1]
Verizon added a net 406,000 postpaid phone subscribers. Its postpaid phone churn rate fell 4 basis points to 0.94 percent. Spending on promotions to acquire customers declined 41 percent, and promotions to retain customers fell 30 percent. Broadband connections increased by a net 314,000, bringing the total to 17.4 million.[1]
Annual earnings outlook increases
The company increased its full-year adjusted earnings forecast to between 5.04 and 5.06 dollars per share. It kept its annual capital expenditure forecast at 16 to 16.5 billion dollars. These are management forecasts accompanying the quarterly release, with planned investment continuing alongside the higher earnings expectation.[1]
Over the first nine months, Verizon returned 12.8 billion dollars to shareholders. That comprised 8.8 billion dollars in dividends and 4 billion dollars in share repurchases. Net unsecured debt stood at 123.7 billion dollars at September’s end, within the same financial update that set out cash generation, investment and shareholder distributions.[1]
