2017-07-26 13:30:29 | On The Fly: What to watch in Verizon's earnings reportVerizon (VZ) is scheduled to report results of its second fiscal quarter before the market opens on Thursday, July 27, with a conference call scheduled for 8:30 am ET. What to watch for: 1. GUIDANCE: When Verizon reported its first fiscal quarter results on April 20, the company said it expects full-year 2017 consolidated revenues, on an organic basis, to be fairly consistent with 2016, with improvement in wireless service revenue and equipment revenue trends; also, full-year 2017 consolidated adjusted earnings per share trends to be similar to consolidated revenue trends; consolidated capital spending for 2017 in the range of $16.8B to $17.5B; the 2017 effective tax rate to be in the range of 34%-36%, excluding impacts from potential tax reform; and That it is on track for a return by the 2018-2019 time frame to the company's credit-rating profile prior to the acquisition of Vodafone's indirect 45% interest in Verizon Wireless in early 2014. Current EPS and revenue consensus estimates sit at 96c and $29.91B, respectively. 2. AT&T, T-MOBILE RESULTS: On July 25, AT&T (T) reported Q2 EPS of 79c and revenue of $39.8B, against consensus estimates of 74c and $39.83B, respectively. AT&T also reported 2.8M wireless net adds, including 2.3M in the U.S., driven by connected devices, prepaid and postpaid, and 476,000 Mexico net adds. On July 19, T-Mobile (TMUS) reported Q2 EPS of 67c and revenue of $10.21B, against analyst estimates of 38c and $9.81B, respectively. T-Mobile also reported net customer additions were 1.3M in Q2, bringing total customer count to 69.6M. T-Mobile said Q2 marks seventeen straight quarters in which T-Mobile generated more than 1M total net customer additions. Branded postpaid net customer additions were 817,000 in Q2 and branded postpaid phone net customer additions were 786,000. 3. NOTABLE TRANSACTIONS: On May 11, Straight Path (STRP) announced a definitive merger agreement under which Verizon will acquire Straight Path for $184.00 per share, reflecting an enterprise value of approximately $3.1B, in an all-stock transaction that is intended to qualify as a tax-free reorganization. On May 2, Verizon announced that it will sell its cloud and managed hosting service to IBM. 4. YAHOO: On June 13, Verizon confirmed the closing of the acquisition of Yahoo and its combination with AOL. Verizon has combined these assets with its existing AOL business to create a new subsidiary, Oath, whose portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, BUILD Studios, Yahoo Finance, Yahoo Mail and more. Tim Armstrong, former CEO of AOL, is now CEO of Oath, which is part of Verizon's Media and Telematics organization. | |
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