VERIZON COMMUNICATIONS INC Quarterly Report for Q2 Ended Jun 30, 2018

Summary

Verizon Communications Inc. reported solid top-line growth in the second quarter of 2018, with total operating revenues increasing by 5.4% year-over-year to $32.2 billion. This growth was primarily driven by a 5.5% increase in Wireless segment revenues, fueled by strong equipment sales and expanded service offerings. The Wireline segment saw a slight decline, down 3.4%, reflecting ongoing industry shifts. Net income for the quarter was $4.2 billion, or $1.00 per diluted share, a slight decrease from the prior year's $4.5 billion, or $1.07 per share. This performance indicates continued revenue expansion, particularly in the core wireless business, alongside efforts to navigate the evolving telecommunications landscape.

Key Highlights

• 1Total operating revenues grew 5.4% to $32.2 billion in Q2 2018, driven by strong Wireless segment performance.
• 2Wireless segment revenue increased by 5.5% to $22.4 billion, with equipment revenue showing significant growth (17.4%).
• 3Net income for the quarter was $4.2 billion, resulting in diluted EPS of $1.00, down slightly from $1.07 in the prior year.
• 4Operating income decreased by 17.5% to $6.6 billion, impacted by increased operating expenses.
• 5The company adopted new revenue recognition standards (Topic 606) starting January 1, 2018, which reclassified revenue between equipment and service, impacting comparability with prior periods.
• 6Capital expenditures were $7.8 billion for the first six months of 2018, up from $7.0 billion in the prior year, reflecting continued investment in network infrastructure.
• 7Free cash flow for the first six months of 2018 significantly increased to $8.6 billion from $2.3 billion in the prior year, primarily due to improved working capital and earnings.

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