On July 22, 2024, Verizon Communications Inc (VZ, Financial) released its 8-K filing for the second quarter of 2024. The company, which is the largest US wireless carrier, serves about 93 million postpaid and 21 million prepaid phone customers and operates fixed-line telecom networks in the Northeast, reaching about 29 million homes and businesses.
Performance Overview
Verizon Communications Inc (VZ, Financial) reported earnings per share (EPS) of $1.09 for Q2 2024, slightly below the analyst estimate of $1.13. However, the company’s revenue of $32.8 billion fell short of the estimated $33.06 billion, reflecting a 0.6% increase from the same quarter last year.
Key Financial Achievements
Verizon's total wireless service revenue grew by 3.5% year-over-year to $19.8 billion, driven by strong consumer wireless service revenue. The company also reported significant broadband subscriber growth, with total broadband net additions of 391,000, marking the eighth consecutive quarter with over 375,000 net additions.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Total Operating Revenue | $32.8 billion | $32.6 billion | 0.6% |
| Net Income | $4.7 billion | $4.8 billion | -1.3% |
| EPS | $1.09 | $1.10 | -0.9% |
Balance Sheet and Cash Flow
Verizon ended the first half of 2024 with free cash flow of $8.5 billion, up from $8.0 billion in the first half of 2023. The company’s total unsecured debt decreased by $3.1 billion compared to the first quarter of 2024, standing at $125.3 billion.
Segment Performance
Consumer Segment: The consumer segment reported a 1.5% year-over-year increase in revenue to $24.9 billion. Wireless service revenue grew by 3.7%, driven by higher postpaid average revenue per account (ARPA) and fixed wireless adoption. However, the segment saw 8,000 wireless retail postpaid phone net losses.
Business Segment: The business segment experienced a 2.4% year-over-year decline in revenue to $7.3 billion, despite a 2.4% increase in wireless service revenue. The segment reported 268,000 wireless retail postpaid net additions, including 156,000 postpaid phone net additions.
Commentary
"The sequential and year-over-year improvements in the second quarter were a reflection of operational excellence and the moves we made to bring choice, value, and control to our customers’ lives," said Verizon Chairman and CEO Hans Vestberg.
Analysis
Verizon's performance in Q2 2024 highlights its strong position in the wireless and broadband markets. The growth in wireless service revenue and broadband subscribers is a positive indicator of the company's ability to attract and retain customers. However, the slight miss on EPS and the decline in net income compared to the previous year suggest that the company faces challenges in managing costs and maintaining profitability.
Overall, Verizon's results demonstrate its operational strength and strategic focus on expanding its wireless and broadband services. Investors will be keen to see how the company navigates these challenges and continues to drive growth in the coming quarters.
Explore the complete 8-K earnings release (here) from Verizon Communications Inc for further details.
