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Will Lower Business Revenues Dent Verizon (VZ) Q4 Earnings?
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Verizon Communications Inc. (VZ - Free Report) is scheduled to report fourth-quarter 2022 results before the opening bell on Jan 24. In the fourth quarter, the Business segment is likely to have recorded year-over-year lower revenues owing to a challenging macroeconomic environment and rising inflationary pressures.
Factors at Play
The Business segment includes the wireless and wireline operations of Wholesale, Public Sector and Other, Small and Medium Business, and Global Enterprise.
During the quarter, Verizon collaborated with Higi to provide digital health solutions and services to support preventative health, drive literacy and identify high-risk consumers eligible to be managed via home-based monitoring. It also partnered with Openloop to accelerate anytime, anywhere virtual care delivery. According to the terms of the collaboration, the firms will work in unison to provide rural communities and seniors with limited access to transportation with greater access to care powered by the Verizon 4G LTE and 5G Ultra Wideband networks. These initiatives are likely to have translated into incremental revenues in the quarter.
In the fourth quarter, Verizon inked an agreement with Wipro Limited to develop global Network-as-a-Service (NaaS) for network modernization and cloud transformation for businesses with a range of pre-configured and tested service chains on a subscription-based consumption model.
In the to-be-reported quarter, the company announced that Synchronoss Technologies, Inc. adopted its private cloud infrastructure to manage all digital content on the Synchronoss Personal Cloud platform. This will enable Verizon Cloud subscribers to seamlessly store photos, videos and other digital files managed by Synchronoss Personal Cloud. The development is likely to have translated into incremental revenues.
However, adverse foreign currency translations and high operating costs are likely to have led to soft margins in the fourth quarter. Continuous infrastructure investments for fiber and 5G deployments are likely to have weighed on the margins. In a bid to expand its customer base, Verizon is spending heavily on promotion and is also offering lucrative discounts, which might have adversely impacted its profitability. Challenging macroeconomic conditions and high inflationary pressures are further likely to have affected the quarterly performance.
Overall Expectations
The Zacks Consensus Estimate for revenues from the Business segment is pegged at $7,785 million, indicating a marginal decrease from $7,810 million reported in the year-ago quarter. Operating income from the segment stands at $653 million, suggesting a fall from $796 million.
The Zacks Consensus Estimate for total revenues is pegged at $35,059 million. It reported revenues of $34,067 million in the year-ago quarter. The consensus estimate for adjusted earnings per share stands at $1.21, which suggests a decline from the year-ago tally of $1.31.
Earnings Whispers
Our proven model predicts an earnings beat for Verizon for the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.42%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Verizon Communications Inc. Price and EPS Surprise
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
The Earnings ESP for T-Mobile US, Inc. (TMUS - Free Report) is +3.00% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 1.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +10.48% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 1.
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Will Lower Business Revenues Dent Verizon (VZ) Q4 Earnings?
Verizon Communications Inc. (VZ - Free Report) is scheduled to report fourth-quarter 2022 results before the opening bell on Jan 24. In the fourth quarter, the Business segment is likely to have recorded year-over-year lower revenues owing to a challenging macroeconomic environment and rising inflationary pressures.
Factors at Play
The Business segment includes the wireless and wireline operations of Wholesale, Public Sector and Other, Small and Medium Business, and Global Enterprise.
During the quarter, Verizon collaborated with Higi to provide digital health solutions and services to support preventative health, drive literacy and identify high-risk consumers eligible to be managed via home-based monitoring. It also partnered with Openloop to accelerate anytime, anywhere virtual care delivery. According to the terms of the collaboration, the firms will work in unison to provide rural communities and seniors with limited access to transportation with greater access to care powered by the Verizon 4G LTE and 5G Ultra Wideband networks. These initiatives are likely to have translated into incremental revenues in the quarter.
In the fourth quarter, Verizon inked an agreement with Wipro Limited to develop global Network-as-a-Service (NaaS) for network modernization and cloud transformation for businesses with a range of pre-configured and tested service chains on a subscription-based consumption model.
In the to-be-reported quarter, the company announced that Synchronoss Technologies, Inc. adopted its private cloud infrastructure to manage all digital content on the Synchronoss Personal Cloud platform. This will enable Verizon Cloud subscribers to seamlessly store photos, videos and other digital files managed by Synchronoss Personal Cloud. The development is likely to have translated into incremental revenues.
However, adverse foreign currency translations and high operating costs are likely to have led to soft margins in the fourth quarter. Continuous infrastructure investments for fiber and 5G deployments are likely to have weighed on the margins. In a bid to expand its customer base, Verizon is spending heavily on promotion and is also offering lucrative discounts, which might have adversely impacted its profitability. Challenging macroeconomic conditions and high inflationary pressures are further likely to have affected the quarterly performance.
Overall Expectations
The Zacks Consensus Estimate for revenues from the Business segment is pegged at $7,785 million, indicating a marginal decrease from $7,810 million reported in the year-ago quarter. Operating income from the segment stands at $653 million, suggesting a fall from $796 million.
The Zacks Consensus Estimate for total revenues is pegged at $35,059 million. It reported revenues of $34,067 million in the year-ago quarter. The consensus estimate for adjusted earnings per share stands at $1.21, which suggests a decline from the year-ago tally of $1.31.
Earnings Whispers
Our proven model predicts an earnings beat for Verizon for the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.42%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Verizon Communications Inc. Price and EPS Surprise
Verizon Communications Inc. price-eps-surprise | Verizon Communications Inc. Quote
Zacks Rank: Verizon has a Zacks Rank #3.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
Motorola Solutions, Inc. (MSI - Free Report) is set to release quarterly numbers on Feb 8. It has an Earnings ESP of +0.33% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for T-Mobile US, Inc. (TMUS - Free Report) is +3.00% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 1.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +10.48% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Feb 1.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.