Summary
Verizon Communications Inc. (VZ) filed an 8-K on July 28, 2008, discussing its second quarter 2008 results and providing an outlook for the remainder of the year. The company projected continued mid-single digit consolidated revenue growth and an ongoing improvement in margins, specifically reiterating a long-range target of 30%-33% EBITDA margin for its wireline segment. Management also indicated confidence in achieving at least a 28% wireline EBITDA margin run rate by the fourth quarter of 2008. Furthermore, Verizon provided guidance for its consolidated effective tax rate for 2008 to be between 34%-36%. Importantly, the company expressed no expectation of significant economic impact on its financial results for the second half of the year and anticipated double-digit earnings growth alongside strong cash flows for the full year 2008. A notable forward-looking statement also indicated that management would propose an increase in the quarterly dividend to the Board of Directors in the fall, with a goal of moving towards an annual dividend increase model.
Key Highlights
- 1Verizon expects mid-single digit consolidated revenue growth for the remainder of 2008.
- 2The company anticipates continued improvement in margins, with a reiterated long-term target of 30%-33% EBITDA margin for the wireline segment.
- 3Verizon expects wireline EBITDA margins to reach at least a 28% run rate by the fourth quarter of 2008.
- 4The consolidated effective tax rate for 2008 is projected to be in the 34%-36% range.
- 5Verizon foresees no significant adverse economic impact on its financial results in the second half of 2008.
- 6The company projects double-digit earnings growth and continued strong cash flows for the full year 2008.
- 7Management plans to propose an increase in the dividend to the Board of Directors in the fall, aiming for an annual dividend increase model.