Verizon Communications Inc. (NYSE:VZ) stock fell 0.71% (As on January 24, 11:22:18 AM UTC-4, Source: Google Finance) after the company unveiled impressive fourth-quarter results and an optimistic forecast for 2024. The company’s financial health was further highlighted by a significant uptick in wireless subscribers during the fourth quarter, with net additions exceeding 400,000. The growth in wireless revenue can be attributed to Verizon’s ownership of TracFone, its premium Unlimited strategy, and effective pricing actions. The company reported 449,000 postpaid phone net additions and 1,460,000 retail postpaid net additions. Verizon’s performance over the past year also reflected a robust increase in annual Free Cash Flow, which reached $18.7B. Verizon’s consumer group added 318,000 mobile subscribers in the three months ended Dec. 31, beating Wall Street’s estimates of 95,900. The net gain, the first one after three down quarters, comes as the New York-based company works to win customers lost to rivals AT&T Inc. and T-Mobile US Inc. Verizon had fallen behind its wireless peers in subscriber growth for years, after costly purchases and strategic missteps allowed competitors to take its share in the already-saturated mobile market.
Further, the company also reported a continued drop in its business group after writing down the unit’s value by $5.8 billion last week, citing declining demand and competitive pressure. The unit’s revenue fell 3.6% to $7.6 billion in the quarter, even as it added wireless phone subscribers. Verizon cited lower sales from wireline services and equipment. The total Verizon Business revenues saw a decline of 3.6% amounting to $7.6 billion, while Verizon Consumer revenue showed a slight increase of 0.7% YoY, reaching $27.0 billion.
VZ in the fourth quarter of FY 23 has reported the adjusted earnings per share of $1.08, which is inline with the analysts’ estimates for the adjusted earnings per share of $1.08. The company had reported 0.3 percent decline in the adjusted revenue growth to $35.1 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $34.5 billion. Despite a slight decline in adjusted EBITDA of 0.6% year-on-year to $11.7 billion, Verizon remains optimistic about its future performance. The company is on track to achieve its goal of 4 million to 5 million subscribers by the end of 2025.
The telecommunications leader reported it expects adjusted earnings per share (EPS) for 2024 to range between $4.50 and $4.70, topping analyst expectations. Looking ahead, the company projects its wireless service revenue to grow by 2% to 3.5% in the upcoming year.