Summary
Verizon Communications Inc. reported solid financial results for the second quarter and first half of 2017. Total operating revenues remained stable year-over-year for the quarter, driven by growth in the Wireline segment and the acquisition of Yahoo's operating business, which significantly boosted the Corporate and Other segment. However, the Wireless segment experienced a slight revenue decline, primarily due to decreased service revenues, although equipment revenues saw an increase. The company made significant strategic moves, including the completion of the Yahoo acquisition, the integration of XO Holdings' wireline business, and the sale of its data center sites. These transactions, along with substantial debt management activities, including a large exchange offer and tender offer for outstanding notes, underscore Verizon's active portfolio management. The company also emphasized its ongoing investments in network infrastructure, particularly for 5G deployment, and its commitment to returning capital to shareholders through dividends.
Financial Highlights
50 data points| Revenue | $30.55B |
| Cost of Revenue | $5.04B |
| Gross Profit | $25.51B |
| SG&A Expenses | $5.88B |
| Operating Expenses | $22.53B |
| Operating Income | $8.01B |
| Interest Expense | $1.22B |
| Net Income | $4.36B |
| EPS (Basic) | $1.07 |
| EPS (Diluted) | $1.07 |
| Shares Outstanding (Basic) | 4.08B |
| Shares Outstanding (Diluted) | 4.09B |
Key Highlights
- 1Total operating revenues remained relatively flat for the quarter ($30.55 billion vs. $30.53 billion in Q2 2016) and decreased by 3.7% for the first half of 2017 ($60.36 billion vs. $62.70 billion in H1 2016).
- 2The Wireless segment saw a revenue decline of 1.9% for the quarter ($21.28 billion vs. $21.70 billion in Q2 2016) and 3.5% for the first half ($42.16 billion vs. $43.71 billion in H1 2016), primarily due to lower service revenues, though equipment revenues increased.
- 3The Wireline segment reported revenue growth of 1.2% for the quarter ($7.80 billion vs. $7.71 billion in Q2 2016) and 0.3% for the first half ($15.57 billion vs. $15.53 billion in H1 2016), driven by increases in Business Markets and Fios revenues.
- 4Significant strategic transactions were completed, including the acquisition of Yahoo's operating business for approximately $4.8 billion, the acquisition of XO Holdings' wireline business for $1.8 billion, and the sale of 23 data center sites for $3.6 billion.
- 5Operating income for the quarter increased to $8.23 billion from $4.55 billion in the prior year, largely impacted by a net gain on sale of divested businesses and lower SG&A expenses.
- 6Cash flow from operations decreased to $9.92 billion for the first six months of 2017 from $12.91 billion in the prior year, partly due to a $3.4 billion discretionary pension plan contribution.
- 7The company engaged in significant debt management, including a large exchange offer and tender offer totaling billions of dollars in outstanding notes.