Back to top

Image: Bigstock

Will Lower Aggregate Revenues Hurt Verizon's (VZ) Q4 Earnings?

Read MoreHide Full Article

Verizon Communications Inc. (VZ - Free Report) is scheduled to report fourth-quarter 2021 results on Jan 25, before the opening bell. In the last reported quarter, the telecom giant beat the Zacks Consensus Estimate by 5 cents, delivering a surprise of 3.7%.

The company is expected to have recorded lower aggregate revenues year over year, primarily due to the sale of the Verizon Media unit. However, positive momentum in its core wireless business is likely to have aided the performance.

Factors at Play

During the fourth quarter, Verizon’s subsidiary, Verizon Business, collaborated with CareAR, a Xerox Company, to enhance the latter’s service delivery and customer experience. This has been done by combining Verizon’s 4G and 5G networks and near real-time compute technology with CareAR’s augmented reality and AI-based platform.

Verizon announced the availability of its 5G Home Internet and 5G Business Internet in parts of three cities — Birmingham, AL; Fort Wayne, IN; and Oklahoma City, OK. Customers also have access to 5G Home Internet or 5G Business Internet in parts of Dayton, OH and Jacksonville, FL. Verizon’s investment in 5G Ultra Wideband enables people to experience unmatched speed on their phones and in homes.

Verizon collaborated with Google Cloud to bring the power of the cloud closer to connected devices at the edge of Verizon’s network. The combination of Verizon’s private On Site 5G and private 5G Edge with Google Distributed Cloud Edge enable enterprises to unlock the power of 5G and mobile edge computing with greater operational efficiency. These developments are likely to have had a positive impact on Verizon’s performance.

For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $33,767 million, which indicates a decline of 2.7% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at $1.28, which suggests an increase of 5.8%.

What Our Model Says

Our proven model predicts an earnings beat for Verizon this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Verizon’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.23% as the former is pegged at $1.29 and the latter at $1.28.

Zacks Rank: Verizon currently carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Tesla, Inc. (TSLA - Free Report) is slated to release fourth-quarter 2021 results on Jan 26. Tesla has an Earnings ESP of +6.30% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vertex Pharmaceuticals Incorporated (VRTX - Free Report) is scheduled to release fourth-quarter 2021 results on Jan 26. Vertex Pharmaceuticals has an Earnings ESP of +10.77% and a Zacks Rank #2.

Meritage Homes Corporation (MTH - Free Report) has an Earnings ESP of +3.12% and a Zacks Rank #2. Meritage Homes is set to report fourth-quarter 2021 results on Jan 26.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.