Verizon Q3 wireless revenues up, media revenue flat, wireline down

Verizon Communications reported consolidated operating revenues of $32.6 billion, up 2.8 percent from third-quarter 2017.  EPS of $1.19, compared with 89 cents in third-quarter 2017. Year-to-date cash flow from operations totaled $26.2 billion through third-quarter 2018, up $9.8 billion year over year.

Year-to-date capital expenditures were $12.0 billion through third-quarter 2018, including spending on the 4G network, the commercial launch of 5G Home, significant fiber deployment in markets nationwide and the pre-positioning for additional 5G services. Full year 2018 CAPEX is expected to be in the range of $16.6 billion to $17.0 billion.

“Verizon has posted a third quarter of strong operational and financial performance,” said CEO Hans Vestberg. “With the beginning of the 5G era in this fourth quarter, we expect that trend to continue. We are investing in networks, creating platforms to add value for customers and maintaining a focused, disciplined strategy. Verizon is best positioned to take full advantage of the opportunities offered by the new game-changing generation of technology.”

Wireless highlights

• Revenue of $23.0 billion, an increase of 6.5 percent year over year. Excluding the impact of the revenue recognition standard, total revenues were $22.9 billion in third-quarter 2018, an increase of 6.1 percent compared with third-quarter 2017.
• Service revenues for the quarter on a reported basis grew 0.8 percent year over year. 
• Approximately 83 percent of Verizon’s postpaid phone base for Q3 were on unsubsidized plans, compared with 78 percent in the same period last year.
• 515,000 retail postpaid net additions in third-quarter 2018, consisting of net phone additions of 295,000, postpaid smartphone net additions of 510,000, tablet losses of 80,000 and 300,000 other connected devices additions, primarily wearables.
• Retail postpaid churn was 1.04 percent in third-quarter 2018, compared with 0.97 percent year over year. Retail postpaid phone churn was 0.80 percent in third-quarter 2018. The company expects retail postpaid phone churn to increase seasonally during fourth-quarter 2018.

Wireline highlights

• Wireline revenues were $7.4 billion. Excluding the impact of the revenue recognition standard, total wireline revenues decreased 3.7 percent year over year in third-quarter 2018.
• Total Fios revenues were $3.0 billion. Excluding the impact of the revenue recognition standard, total Fios revenues increased 1.6 percent year over year in third-quarter 2018.
• Verizon added a net of 54,000 Fios Internet connections, and lost 63,000 Fios Video connections in third-quarter 2018, impacted by ongoing shifts away from linear video offerings.
• Wireline operating loss was $50 million in third-quarter 2018, and segment operating loss margin was 0.7 percent. 

Media and other highlights

• Oath revenues were $1.8 billion in Q3, 6.9 percent below the same quarter last year. The company expects Oath revenues to be relatively flat in the near term and does not expect to meet the previous target of $10 billion in Oath revenues by 2020. 
• In the telematics business, total Verizon Connect revenues, excluding the impact of the revenue recognition standard, were $241 million in third-quarter 2018. IoT revenues, including Verizon Connect, increased approximately 12 percent year over year, excluding the impact of the revenue recognition standard.