Summary
Verizon Communications Inc. (VZ) reported its third-quarter 2013 financial results, showcasing robust revenue growth driven primarily by its Wireless segment. Total operating revenues increased by 4.4% year-over-year to $30.3 billion for the three months ended September 30, 2013. The Wireless segment saw a 7.2% increase in revenue, largely fueled by higher service revenue from increased retail postpaid connections and smartphone penetration. The company also announced a significant strategic move: an agreement to acquire Vodafone's 45% stake in Verizon Wireless for approximately $130 billion. This transaction, expected to close in early 2014, will result in Verizon fully owning its wireless operations, funded by a combination of cash, Verizon stock, and debt. While the company's overall debt levels have increased significantly due to financing for this transaction, management emphasized its strong operating cash flow and free cash flow generation, which are expected to support continued network investments and shareholder returns.
Financial Highlights
51 data points| Revenue | $30.28B |
| Cost of Revenue | $10.96B |
| Gross Profit | $19.32B |
| SG&A Expenses | $8.04B |
| Operating Expenses | $23.15B |
| Operating Income | $7.13B |
| Interest Expense | $555.00M |
| Net Income | $2.23B |
| EPS (Basic) | $0.78 |
| EPS (Diluted) | $0.78 |
| Shares Outstanding (Basic) | 2.87B |
| Shares Outstanding (Diluted) | 2.87B |
Key Highlights
- 1Total operating revenues increased by 4.4% to $30.3 billion for the third quarter of 2013.
- 2Wireless segment revenue grew by 7.2% to $20.4 billion, driven by strong service revenue growth and increased smartphone penetration.
- 3Agreement to acquire Vodafone's 45% stake in Verizon Wireless for approximately $130 billion, expected to close in Q1 2014, will result in full ownership of the wireless business.
- 4Significant increase in total debt to $99.1 billion as of September 30, 2013, primarily due to debt issuance to finance the Vodafone acquisition.
- 5Net income attributable to Verizon increased to $2.23 billion ($0.78 per share) from $1.59 billion ($0.56 per share) in the prior year's comparable period.
- 6Capital expenditures were $11.8 billion for the first nine months of 2013, consistent with the previous year, primarily for 4G LTE network build-out.
- 7Generated $28.4 billion in net cash from operating activities for the first nine months of 2013, up from $24.8 billion in the prior year.