Verizon Communications reported total Q4 2014 operating revenues of $33.2 billion, a 6.8 percent increase compared with fourth-quarter 2013. There was a loss of 54 cents per share, compared with earnings per share (EPS) of $1.76 in 4Q 2013, due to non-operational items. Full-year 2014 operating revenues were $127.1 billion, up 5.4 percent or $6.5 billion, compared with full-year 2013.
Some highlights:
- New revenue streams from the Internet of Things and telematics totaled approximately $585 million in 2014, with an annual growth rate of more than 45 percent. The company recently launched Verizon Vehicle, a connected-vehicle service for consumers, with an addressable market of more than 200 million vehicles.
- In 2014, cash flows from operations totaled $30.6 billion, and free cash flow (non-GAAP, cash from operations less capital expenditures) totaled $13.4 billion. Capital expenditures totaled $17.2 billion for 2014, up 3.5 percent year over year.
Wireless
- Total revenues were $23.4 billion in fourth-quarter 2014, up 11.0 percent year over year. Service revenues in the quarter totaled $18.2 billion, up 2.8 percent year over year. Retail service revenues grew 2.6 percent year over year, to $17.4 billion.
- Verizon Wireless full-year total revenues were $87.6 billion, an increase of 8.2 percent compared with full-year 2013 revenues of $81.0 billion.
- Verizon Wireless added 2.1 million retail net connections, including 2.0 million retail postpaid connections, in the fourth quarter. These additions exclude acquisitions and adjustments.
- At the end of the year, the company had 108.2 million retail connections. This includes 102.1 million retail postpaid connections, a 5.5 percent increase year over year.
- Verizon Wireless had 35.6 million retail postpaid accounts at the end of the fourth quarter, up 1.5 percent compared with fourth-quarter 2013, and 2.87 connections per account, up 4.0 percent year over year.
- During fourth-quarter 2014, retail postpaid device activations were up nearly 34 percent over the same period in 2013. About three-quarters of phone activations in the quarter were customer upgrades. Approximately 9.8 percent of the retail postpaid base upgraded devices, and 93 percent of these upgrades were 4G smartphones.
- The company added a net of 672,000 postpaid phones, as 4G smartphone additions of 1.5 million were offset by net declines in basic and 3G smartphones. In terms of Internet devices, the company added 1.4 million new 4G LTE tablets.
- At the end of 2014, smartphones accounted for 78.6 percent of the Verizon Wireless retail postpaid customer phone base, up from 70.0 percent at the end of 2013.
- Retail postpaid churn was 1.14 percent in the fourth quarter, an increase of 14 basis points sequentially and 18 basis points year over year. Retail churn was 1.39 percent in the fourth quarter, up 10 basis points sequentially and 12 basis points year over year.
Wireline
- Total revenues were $9.6 billion in fourth-quarter 2014, down 1.6 percent year over year. Consumer revenues were $4.0 billion, up 4.1 percent compared with fourth-quarter 2013, with FiOS revenues representing 77 percent of the total.
- Total FiOS revenues grew 11.6 percent, to $3.3 billion, comparing fourth-quarter 2014 with fourth-quarter 2013. For the full year, FiOS revenues totaled $12.7 billion in 2014, up 13.6 percent compared with $11.2 billion in 2013.
- Sales of strategic services to enterprise customers increased 1.5 percent, to $2.1 billion, compared with fourth-quarter 2013. Strategic services include private IP, Ethernet, data center, cloud, security and managed services.
- In fourth-quarter 2014, Verizon added 145,000 net new FiOS Internet connections and 116,000 net new FiOS Video connections. Verizon had totals of 6.6 million FiOS Internet and 5.6 million FiOS Video connections at year-end 2014, representing year-over-year increases of 9.0 percent and 7.4 percent, respectively.
- FiOS Internet penetration (subscribers as a percentage of potential subscribers) was 41.1 percent at the end of 2014, compared with 39.5 percent at the end of 2013. In the same periods, FiOS Video penetration was 35.8 percent, compared with 35.0 percent. The FiOS network passed more than 19.8 million premises by year-end 2014.
- By year-end 2014, 59 percent of consumer FiOS Internet customers subscribed to FiOS Quantum, which provides speeds ranging from 50 to 500 megabits per second, up from 57 percent at the end of third-quarter 2014.
- Broadband connections totaled 9.2 million at year-end 2014, a 2.1 percent year-over-year increase. Net broadband connections increased by 59,000 in fourth-quarter 2014 and 190,000 for the full year, as FiOS Internet net additions more than offset declines in DSL-based High Speed Internet connections.
- In fourth-quarter 2014, Verizon migrated an additional 52,000 customers who had been using copper connections, bringing the full-year total to around 255,000. Verizon has converted more than 800,000 customers to fiber since starting this initiative in 2011.