Verizon 4Q16 earnings disappoint the Street
Verizon disappointed investors by providing an 86 cent dividend in their fourth quarter earnings — they wanted 89 cents.
Total revenues for the quarter came in at $32.3 billion, down 5.5 percent from 2015. Also down were operating income by 18 percent and net income by more than 16.5 percent.
The wireless division saw a minor decline in intake, but while equipment and other revenue were on the rise, it’s service revenue that hit the snag: $16.3 billion, down 5 percent year-over-year. Operating expenses ticked up a slight bit, dampening operating income to $6.3 billion, 7.2 percent worse off. Margins dropped from 28.6 percent to 27 percent.
Total subscriber base jumped to 114.2 million with 591,000 postpaid gains (analysts wanted 726,000) and a loss of 9,000 prepaid users. Average bills dropped on an annual basis by 4.3 percent to $141.89 — revenue per account has been dropping quarter after quarter for a few years.
And so, we come to a statement from chairman and CEO Lowell McAdams:
“We are positioning Verizon for future growth and continued sustainable shareholder value. In the fourth quarter we expanded our customer base in highly competitive wireless and broadband markets […] We enter 2017 with confidence, based on our investments in next-generation networks and the new capabilities we have acquired.”
Shares of VZ fell 4.4 percent to $50.12 on Tuesday.