Summary
Verizon Communications Inc. (VZ) filed an 8-K on July 25, 2011, to disclose information discussed during a July 22, 2011 conference call. The key takeaway for investors is Verizon's positive outlook for its wireless segment. Specifically, the company anticipates an acceleration in the year-over-year growth rate of average monthly service revenue per user (ARPU) for both smartphones and feature phones, building on a 3.2% increase in the second quarter of 2011. This growth is supported by an expected increase in smartphone penetration, which Verizon projects to reach 50% by the first quarter of 2012. These developments are expected to occur without negatively impacting the company's previously stated revenue and earnings growth guidance for the full year 2011. Investors should note that the company has provided forward-looking statements subject to various risks and uncertainties.
Key Highlights
- 1Verizon expects improved year-over-year growth in Wireless postpaid phone ARPU from smartphones and feature phones, exceeding Q2 2011's 3.2% growth rate.
- 2By the end of Q1 2012, Verizon aims for 50% smartphone penetration within its wireless customer base.
- 3The anticipated increase in smartphone penetration is not expected to affect the previously issued 2011 guidance for revenue growth (4-8%) and earnings growth (5-8% over an adjusted $2.08 EPS base).
- 4Verizon Wireless had $7.3 billion in net debt at the close of the second quarter of 2011.
- 5The disclosure was made via a Regulation FD (Fair Disclosure) announcement, indicating material non-public information being shared with the investment community.
- 6The report includes a standard safe harbor statement for forward-looking statements, cautioning investors about inherent risks and uncertainties.