Summary
Verizon Communications Inc. reported solid financial results for the first quarter of 2016, demonstrating resilience in its core businesses. Total operating revenues saw a slight increase of 0.6% to $32.17 billion, driven by robust growth in wireless equipment sales and contributions from the recently acquired AOL, partially offset by declines in wireless service revenues and wireline revenues. Profitability remained strong, with Net Income attributable to Verizon reaching $4.31 billion, translating to diluted Earnings Per Share (EPS) of $1.06, an improvement from $1.02 in the prior year period. The company generated substantial operating cash flow, providing flexibility for capital expenditures and returning value to shareholders through dividends. Key strategic initiatives, such as the transition to device payment plans in wireless and the continued expansion of Fios in wireline, are progressing. The company also made significant progress on its divestiture of certain wireline assets in California, Florida, and Texas, which closed on April 1, 2016, simplifying its operational footprint.
Financial Highlights
49 data points| Revenue | $32.17B |
| Cost of Revenue | $5.00B |
| Gross Profit | $27.17B |
| SG&A Expenses | $7.60B |
| Operating Expenses | $24.23B |
| Operating Income | $7.94B |
| Interest Expense | $1.19B |
| Net Income | $4.31B |
| EPS (Basic) | $1.06 |
| EPS (Diluted) | $1.06 |
| Shares Outstanding (Basic) | 4.08B |
| Shares Outstanding (Diluted) | 4.08B |
Key Highlights
- 1Total Operating Revenues increased by 0.6% to $32.17 billion, primarily driven by higher wireless equipment sales and the acquisition of AOL.
- 2Net Income attributable to Verizon was $4.31 billion, leading to Diluted EPS of $1.06, up from $1.02 in the prior year.
- 3Wireless segment revenues declined slightly by 1.5% to $22.00 billion, impacted by a 6.2% decrease in service revenue due to customer migration to unsubsidized plans, though equipment revenue increased by 17.2%.
- 4Wireline segment revenues decreased by 1.9% to $9.29 billion, with declines in Global Enterprise and Global Wholesale offset by growth in Fios revenues.
- 5Operating income was largely stable at $7.94 billion compared to $7.96 billion in the prior year, demonstrating operational efficiency.
- 6The company generated strong Net cash provided by operating activities of $7.42 billion, a decrease from $10.17 billion in Q1 2015, partly due to a large tower sale in the prior year.
- 7The divestiture of Verizon's local exchange business and related landline activities in California, Florida, and Texas to Frontier Communications closed on April 1, 2016, simplifying the Wireline segment.