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.

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About The Author
Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.