Summary
Verizon Communications Inc. (VZ) reported its third-quarter 2016 financial results, showing a continuation of revenue trends seen in prior periods. Total operating revenues decreased by 6.7% year-over-year to $30.9 billion for the three months ended September 30, 2016, and by 3.8% to $93.6 billion for the nine months ended September 30, 2016. This decline was primarily driven by a decrease in the Wireless segment's service and equipment revenues, and the Wireline segment's performance, partly due to customer migration to unsubsidized service pricing and a decrease in traditional services. Despite revenue declines, the company reported a net income of $3.62 billion for the quarter, or $0.89 per diluted share, down from $4.04 billion, or $0.99 per diluted share, in the prior year's third quarter. A significant factor impacting profitability was a substantial increase in severance, pension, and benefit charges, particularly in the nine-month period, totaling $4.51 billion compared to $342 million in the prior year. The company also made progress on its strategic initiatives, including the announced acquisition of Yahoo's operating business and the acquisition of Fleetmatics, signaling a continued focus on expanding its digital media and IoT capabilities.
Financial Highlights
50 data points| Revenue | $30.94B |
| Cost of Revenue | $5.24B |
| Gross Profit | $25.70B |
| SG&A Expenses | $8.23B |
| Operating Expenses | $24.40B |
| Operating Income | $6.54B |
| Interest Expense | $1.04B |
| Net Income | $3.62B |
| EPS (Basic) | $0.89 |
| EPS (Diluted) | $0.89 |
| Shares Outstanding (Basic) | 4.08B |
| Shares Outstanding (Diluted) | 4.09B |
Key Highlights
- 1Total operating revenues for the third quarter of 2016 decreased by 6.7% to $30.9 billion compared to the same period in 2015.
- 2Net income attributable to Verizon for the quarter was $3.62 billion, down from $4.04 billion in the prior year's third quarter.
- 3Diluted EPS attributable to Verizon was $0.89, a decrease from $0.99 in the prior year's third quarter.
- 4Significant severance, pension, and benefit charges negatively impacted the nine-month results, totaling $4.51 billion.
- 5The company is pursuing strategic acquisitions, including the announced acquisition of Yahoo's operating business and the pending acquisition of Fleetmatics.
- 6Capital expenditures for the first nine months of 2016 were $11.4 billion, a decrease from $12.5 billion in the same period of 2015, reflecting continued network investment.
- 7Free cash flow for the first nine months of 2016 was $6.2 billion, a significant decrease from $15.9 billion in the prior year, largely due to working capital impacts and higher tax payments.