Verizon Communications Inc. (NYSE: VZ) stock fell over 0.5% in the pre-market session of Jan 27th, 2021 (Source: Google finance) as the company posted better than expected results for the fourth quarter of FY 20. Total wireless service revenue growth and strong results in Verizon Media Group were offset by lower wireless equipment revenue and ongoing declines in legacy wireline products. Adjusted EBITDA for the quarter was $11.7 billion as compared to $11.1 billion last year, a 5.3% increase on the back of service and other revenue growth and disciplined spending. The Business Excellence program has resulted in realizing cumulative cash savings of $9.5 billion, and are well positioned to achieve the $10 billion goal ahead of the year-end 2021 target.
The company generated cash flow from operating activities of $41.8 billion for the year, which represents an increase of $6 billion from the prior year, due to continued performance and strength in the business, lower tax payments due to a one-time cash tax benefit received earlier in the year and reductions in working capital primarily due to lower wireless volumes. Capital spending in 2020 were of total $18.2 billion, as the company continued to support traffic growth on the 4G LTE network while expanding the reach and capacity of the 5G Ultra-Wideband Network and launching the nationwide 5G network. As a result, the company generated free cash flow for the year of $23.6 billion, up 32.4% year-over-year. The company exited the quarter with net unsecured debt of $96.3 billion, and the net unsecured debt-to-adjusted EBITDA ratio was approximately 2.0 times versus the targeted range of 1.75 times to 2.0 times.
Meanwhile, the company in this quarter has launched a nationwide 5G service to coincide with the release of the iPhone 12 lineup, which fully supports our Ultra-Wideband offering, enabling Verizon customers to utilize a full range of connectivity provided by this iconic device. The company has recently added Discovery to the list of existing successful partnerships, which includes Apple and Disney.
VZ in the fourth quarter of FY 20 has reported the adjusted earnings per share of $1.21, beating the analysts’ estimates for the adjusted earnings per share of $1.16, according to the Zacks Consensus Estimate. The company had reported 0.2 percent fall in the adjusted revenue to $34.69 billion in the fourth quarter of FY 20, beating the analysts’ estimates for revenue by 0.72%. In the fourth quarter, the company delivered ARPA growth of 1.8% year-over-year.