Summary
Verizon Communications Inc. reported solid financial results for the third quarter and first nine months of 2012, demonstrating revenue growth and increased operating income. Total revenues increased by 3.9% for the quarter and 4.1% year-to-date, primarily driven by robust performance in the Verizon Wireless segment, which saw a 7.3% revenue increase driven by strong demand for smartphones and data services. The Wireline segment experienced a slight revenue decline of 2.3% for the quarter, mainly due to decreases in Global Wholesale and Enterprise Core revenues, although Mass Markets showed positive growth driven by FiOS services. Profitability also improved, with operating income rising significantly for both the quarter and year-to-date. The company made substantial investments in acquiring wireless spectrum, particularly AWS spectrum for $3.9 billion, to enhance its 4G LTE network capacity. Strategic acquisitions like HUGHES Telematics were also completed to bolster telematics offerings. Management highlighted continued investment in technology and network expansion as key to future growth and shareholder value, with a focus on higher-margin areas like wireless data and strategic services.
Financial Highlights
49 data points| Revenue | $29.01B |
| Cost of Revenue | $10.99B |
| Gross Profit | $18.02B |
| SG&A Expenses | $8.37B |
| Operating Expenses | $23.52B |
| Operating Income | $5.48B |
| Interest Expense | $632.00M |
| Net Income | $1.59B |
| EPS (Basic) | $0.56 |
| EPS (Diluted) | $0.56 |
| Shares Outstanding (Basic) | 2.86B |
| Shares Outstanding (Diluted) | 2.87B |
Key Highlights
- 1Total operating revenues increased by 3.9% to $29.0 billion for the third quarter and 4.1% to $85.8 billion for the nine months ended September 30, 2012, compared to the prior year periods.
- 2Verizon Wireless continued its strong performance, with total operating revenues growing by 7.3% to $19.0 billion for the quarter and 7.7% to $55.9 billion year-to-date, driven by increased retail service and equipment revenues.
- 3Operating income increased by 17.9% to $5.5 billion for the quarter and 16.7% to $16.3 billion for the nine months, reflecting revenue growth and effective expense management.
- 4Significant investments were made in wireless spectrum acquisition, with Verizon Wireless acquiring AWS spectrum for $3.9 billion to expand 4G LTE capacity.
- 5The company completed the acquisition of HUGHES Telematics for $0.6 billion to enhance its telematics offerings, adding goodwill and other intangibles.
- 6Wireline segment revenues saw a slight decrease of 2.3% for the quarter to $9.9 billion, though Mass Markets revenue grew 3.8% due to FiOS services.
- 7Free cash flow generation was strong, increasing to $13.4 billion for the nine months ended September 30, 2012, up from $9.0 billion in the prior year.