3Q 2020 highlights
- $1.05 in earnings per share (EPS), in contrast with $1.25 in 3Q 2019; adjusted EPS (non-GAAP), excluding a particular merchandise, of $1.25, in contrast with $1.25 in 3Q 2019.
- Working income decline of 4.1 p.c from third-quarter 2019.
- 12 months-to-date money circulation from operations of $32.5 billion, a rise of $5.7 billion 12 months over 12 months.
- Whole income of $21.7 billion, a lower of 4.Three p.c 12 months over 12 months.
- 136,000 retail postpaid internet additions, together with 142,000 cellphone internet additions and 258,000 postpaid smartphone internet additions.
- Whole retail postpaid churn of 0.80 p.c, and retail postpaid cellphone churn of 0.63 p.c.
- 139,000 Fios Web internet additions, a rise from 30,000 Fios Web internet additions in third-quarter 2019, and 144,000 Fios Web internet additions throughout Shopper and Enterprise, probably the most since fourth-quarter 2014.
- Whole income of $7.7 billion, a lower of 1.7 p.c 12 months over 12 months.
- 417,000 retail postpaid internet additions, together with 141,000 cellphone internet additions.
- Whole retail postpaid churn of 1.19 p.c, and retail postpaid cellphone churn of 0.96 p.c.
- Whole wi-fi service income of $16.Four billion, a 0.Three p.c improve 12 months over 12 months.
- 553,000 retail postpaid internet additions, together with 283,000 cellphone internet additions and 428,000 postpaid smartphone internet additions.
- Whole retail postpaid churn of 0.89 p.c, and retail postpaid cellphone churn of 0.69 p.c.
NEW YORK – Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported robust third-quarter outcomes right now and revised earnings steering upward for the 12 months. The corporate’s efficiency was highlighted by will increase in wi-fi service income and whole Fios Web internet additions.
“We proceed to exhibit our energy and resilience by delivering very robust third quarter monetary outcomes,” mentioned Verizon Chairman and CEO Hans Vestberg. “We’re energized by the transformational expertise that our 5G Extremely Wideband and 5G nationwide convey. Our purpose-driven tradition paired with our community management will form the long run, for the higher.”
For third-quarter 2020, Verizon reported EPS of $1.05, in contrast with $1.25 in third-quarter 2019. On an adjusted foundation (non-GAAP), third-quarter 2020 EPS, excluding a particular merchandise, was $1.25, in contrast with adjusted EPS of $1.25 in third-quarter 2019. The corporate estimates that third-quarter 2020 EPS and adjusted EPS included roughly damaging 5 cents of COVID-19-related internet impacts. Third-quarter 2020 EPS included a internet pre-tax cost of about $1.1 billion associated to a mark-to-market adjustment for pension liabilities.
In third-quarter 2020, Verizon’s outcomes additionally included the continued results of a discount in advantages from the adoption of a income recognition normal, primarily as a result of deferral of fee expense. The online influence was 2 cents in third-quarter 2020 and seven cents 12 months thus far.
- Whole consolidated working revenues in third-quarter 2020 have been $31.5 billion, down 4.1 p.c from third-quarter 2019. This decline was because of decrease buyer exercise and the timing of sure machine launches.
- 12 months-to-date money circulation from operations totaled $32.5 billion, a rise of $5.7 billion 12 months over 12 months. This progress was a results of the continued efficiency and energy of the enterprise, a non-recurring tax merchandise in second-quarter 2020, enhancements in working capital primarily because of decrease volumes, and funds associated to the Voluntary Separation Plan in full-year 2019 that didn’t repeat this 12 months.
- 12 months-to-date capital expenditures have been $14.2 billion. Capital expenditures proceed to help the expansion in site visitors on the corporate’s 4G LTE community, the launch and continued build-out of the corporate’s 5G Extremely Wideband and nationwide networks, the improve to its Clever Edge Community structure, and the deployment of serious fiber in additional than 60 markets.
- In 2018, Verizon introduced a purpose to realize $10 billion in cumulative money financial savings by the tip of 2021. This initiative has yielded $8.Three billion of cumulative money financial savings for the reason that program started and is on monitor to realize its goal. The corporate expects to proceed its concentrate on operational efficiencies after the present goal is achieved to establish extra long-term transformation initiatives and ship the associated value financial savings.
- The corporate ended third-quarter 2020 with free money circulation (non-GAAP) of $18.Three billion, a rise of $3.9 billion 12 months over 12 months, and $9.Zero billion of money available.
- Verizon’s unsecured debt stability elevated 12 months over 12 months by $4.7 billion to $105.5 billion in third-quarter 2020, and the corporate’s internet unsecured debt (non-GAAP) decreased by $1.Three billion 12 months over 12 months to $96.5 billion. Verizon’s internet earnings in third-quarter 2020 was $4.5 billion, and its adjusted EBITDA (non-GAAP) was $11.9 billion. Verizon’s internet unsecured debt to adjusted EBITDA ratio (non-GAAP) was 2.1 occasions versus its focused vary of 1.75 to 2.Zero occasions. The corporate stays targeted on reaching its internet unsecured debt to EBITDA goal whereas sustaining a robust monetary place to provide it flexibility to spend money on the enterprise.
- Whole Verizon Shopper revenues have been $21.7 billion, a lower of 4.Three p.c 12 months over 12 months, primarily pushed by a big lower in wi-fi tools income because of diminished buyer exercise.
- All through third-quarter 2020, Verizon steadily reopened all of its company-operated retail shops, implementing practices to bolster social distancing equivalent to touch-less retail, appointment scheduling, and curbside pickup. In third-quarter 2020, Shopper reported 136,000 wi-fi retail postpaid internet additions. This consisted of 142,000 cellphone internet additions and 113,000 pill internet losses, offset by 107,000 different related machine internet additions. Postpaid smartphone internet additions have been 258,000.
- Shopper wi-fi service revenues have been $13.Four billion in third-quarter 2020, a 0.7 p.c lower 12 months over 12 months.
- Whole retail postpaid churn was 0.80 p.c in third-quarter 2020, and retail postpaid cellphone churn was 0.63 p.c.
- Shopper reported 139,000 Fios Web internet additions in third-quarter 2020, a rise from 30,000 Fios Web internet additions in third-quarter 2019. Shopper and Enterprise reported 144,000 whole Fios Web internet additions, probably the most Fios Web internet additions since fourth-quarter 2014. Shopper reported 61,000 Fios Video internet losses in third-quarter 2020, reflecting the continuing shift from conventional linear video to over-the-top choices.
- In third-quarter 2020, section working earnings was $7.Four billion, a lower of 0.7 p.c 12 months over 12 months, and section working earnings margin was 34.2 p.c, a rise from 33.Zero p.c in third-quarter 2019. Phase EBITDA (non-GAAP) totaled $10.Three billion in third-quarter 2020, flat 12 months over 12 months. Phase EBITDA margin (non-GAAP) was 47.Four p.c in third-quarter 2020, up from 45.Three p.c in third-quarter 2019, and included roughly 60 foundation factors of headwind from the deferral of fee expense.
- Whole Verizon Enterprise revenues have been $7.7 billion, down 1.7 p.c 12 months over 12 months. The Enterprise section continues to be resilient by a difficult setting as the corporate offers important options to clients throughout state and native authorities businesses and schooling suppliers.
- Enterprise reported 417,000 wi-fi retail postpaid internet additions in third-quarter 2020. This consisted of 141,000 cellphone internet additions, 86,000 pill internet additions, and 190,000 different related machine additions.
- Enterprise wi-fi service revenues have been $3.Zero billion in third-quarter 2020, a 4.9 p.c improve 12 months over 12 months, primarily pushed by Public Sector and Small and Medium Enterprise.
- Whole retail postpaid churn was 1.19 p.c in third-quarter 2020, and retail postpaid cellphone churn was 0.96 p.c.
- In third-quarter 2020, section working earnings was $923 million, a lower of 5.5 p.c 12 months over 12 months, and section working earnings margin was 11.9 p.c, in contrast with 12.Four p.c in third-quarter 2019. Phase EBITDA (non-GAAP) totaled $2.Zero billion in third-quarter 2020, a lower of 1.9 p.c 12 months over 12 months. Phase EBITDA margin (non-GAAP) was 25.2 p.c, which was flat 12 months over 12 months.
- Whole Verizon Media revenues have been $1.7 billion, down 7.Four p.c 12 months over 12 months, however a rise of 21.2 p.c from second-quarter 2020. 12 months over 12 months income traits improved every month throughout third-quarter 2020. Traits ensuing from the COVID-19 pandemic continued to influence each search and promoting within the quarter, although Media continues to drive elevated buyer engagement on its owned and operated properties.
Outlook and steering
Based mostly on three quarters of resilient earnings and projected traits into fourth-quarter 2020, Verizon is updating monetary steering for full-year 2020:
- The corporate now expects adjusted EPS progress (non-GAAP) of Zero to 2 p.c, an replace from prior steering for 2020 adjusted EPS progress (non-GAAP) of -2 to 2 p.c. This replace consists of the beforehand mentioned accounting headwinds, impacts from COVID-19, and new machine launches in fourth-quarter 2020.
- The corporate now expects whole wi-fi service income progress of not less than 2 p.c in fourth-quarter 2020 in comparison with final 12 months.
Verizon expects the next outcomes for full-year 2020:
- Capital spending to now be on the increased finish of the guided vary of $17.5 billion to $18.5 billion.
- Adjusted efficient earnings tax price (non-GAAP) within the vary of 23 p.c to 25 p.c.
NOTE: See the accompanying schedules and www.verizon.com/about/investors for reconciliations to usually accepted accounting ideas (GAAP) for non-GAAP monetary measures cited on this doc.
On this communication we’ve got made forward-looking statements. These statements are primarily based on our estimates and assumptions and are topic to dangers and uncertainties. Ahead-looking statements embody the data regarding our doable or assumed future outcomes of operations. Ahead-looking statements additionally embody these preceded or adopted by the phrases “anticipates,” “believes,” “estimates,” “expects,” “hopes” or related expressions. For these statements, we declare the safety of the protected harbor for forward-looking statements contained within the Personal Securities Litigation Reform Act of 1995. We undertake no obligation to revise or publicly launch the outcomes of any revision to those forward-looking statements, besides as required by regulation. Given these dangers and uncertainties, readers are cautioned to not place undue reliance on such forward-looking statements. The next essential components, together with these mentioned in our filings with the Securities and Change Fee (the “SEC”), might have an effect on future outcomes and will trigger these outcomes to vary materially from these expressed within the forward-looking statements: cyber assaults impacting our networks or programs and any ensuing monetary or reputational influence; pure disasters, terrorist assaults or acts of battle or important litigation and any ensuing monetary or reputational influence; the influence of the worldwide outbreak of COVID-19 on our operations, our workers and the methods by which our clients use our networks and different services and products; disruption of our key suppliers’ or distributors’ provisioning of services or products, together with because of the COVID-19 outbreak; materials adversarial modifications in labor issues and any ensuing monetary or operational influence; the results of competitors within the markets by which we function; failure to make the most of developments in expertise and handle modifications in client demand; efficiency points or delays within the deployment of our 5G community leading to important prices or a discount within the anticipated advantages of the enhancement to our networks; the shortcoming to implement our enterprise technique; adversarial situations within the U.S. and worldwide economies; modifications within the regulatory setting by which we function, together with any improve in restrictions on our means to function our enterprise; our excessive stage of indebtedness; an adversarial change within the rankings afforded our debt securities by nationally accredited rankings organizations or adversarial situations within the credit score markets affecting the fee, together with rates of interest, and/or availability of additional financing; important will increase in profit plan prices or decrease funding returns on plan belongings; modifications in tax legal guidelines or treaties, or of their interpretation; and modifications in accounting assumptions that regulatory businesses, together with the SEC, might require or that consequence from modifications within the accounting guidelines or their utility, which might end in an influence on earnings.