Verizon Modestly Misses With Revenues of $32.1B for Q2 19
NEW YORK -- Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported strong second-quarter 2019 results highlighted by an increase in net wireless customer additions, continued customer loyalty and industry-leading wireless products and services.
"Verizon finished strong in the first half of 2019 by delivering solid financial results while transforming the business under the new operating structure and advancing our leadership in 5G," said Chairman and CEO Hans Vestberg. "Verizon made history this quarter by becoming the first carrier in the world to launch 5G mobility. We are focused on optimizing our next-generation networks and enhancing the customer experience while we head into the second half of the year with great momentum."
For second-quarter 2019, Verizon reported EPS of 95 cents, compared with $1.00 in second-quarter 2018. On an adjusted basis (non-GAAP), second-quarter 2019 EPS, excluding a special item, was $1.23, compared with adjusted EPS of $1.20 in second-quarter 2018. Verizon’s second-quarter 2019 EPS included 28 cents in early debt redemption costs.
In second-quarter 2019, Verizon's results included the effects of a reduction in benefits from the adoption of a revenue recognition standard, primarily due to the deferral of commission expense, and the adoption of a lease accounting standard. The combined net impact was a 4 cent year-over-year headwind, which is included in the year-over-year increase in adjusted EPS.
Consolidated results: Total consolidated operating revenues in second-quarter 2019 were $32.1 billion, down 0.4 percent from second-quarter 2018. Wireless service revenue growth was offset by lower wireless equipment revenue and wireline service revenue.
Cash flow from operations totaled $15.8 billion in second-quarter 2019, a decline of approximately $600 million year over year. Operational improvements in Verizon's businesses were offset by higher cash taxes and cash payments related to the Voluntary Separation Program.
First half 2019 capital expenditures totaled $8.0 billion. Verizon's capital expenditures continue to support the launch and build-out of its 5G Ultra Wideband network, the growth in data and video traffic on the company's 4G LTE network, the deployment of significant fiber in markets nationwide and the upgrade to Verizon's Intelligent Edge Network architecture.
In 2018, Verizon announced a goal to achieve $10 billion in cumulative cash savings by 2021. This initiative has yielded $4.1 billion of cumulative cash savings since this program began. At the end of second-quarter 2019, Verizon completed the third and final phase of its Voluntary Separation Program and has realized approximately $480 million of expense savings year-to-date. The company expects additional incremental savings in third-quarter 2019, and is on track to achieve its cumulative cash savings goal.
Net income was $4.1 billion in second-quarter 2019. EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled approximately $10.8 billion. Consolidated operating income margin was 24.5 percent in second-quarter 2019, compared with 20.5 percent in second-quarter 2018. Consolidated EBITDA margin (non-GAAP) was 33.5 percent in second-quarter 2019, compared with 34.5 percent in second-quarter 2018. Adjusted EBITDA margin (non-GAAP) in second-quarter 2019 was 37.7 percent. Consolidated adjusted EBITDA (non-GAAP) in second-quarter 2019 was $12.1 billion, an increase of approximately $200 million year over year.
Source: Verizon Communications Inc. (NYSE: VZ)