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Will Soft Business Revenues Affect Verizon (VZ) Q4 Earnings?
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Verizon Communications Inc. (VZ - Free Report) is scheduled to report fourth-quarter 2023 results before the opening bell on Jan 23. In the quarter, the Business segment is likely to have recorded year-over-year lower revenues owing to a challenging macroeconomic environment.
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 fourth quarter, Verizon completed the deployment of the Express Entry facility at the Bank of America Stadium. It incorporates 5G Edge Accelerated Access technology, which has facial authentication features that precisely authenticate visitor identity and accelerate the ticketing process. Its cloud-based infrastructure reduces the expenses related to on-premise servers.
The automated check-in facility offers nearly real-time, touchless entry into the venue, reducing congestion and delays at the entrance. Along with improving overall safety and security, these advanced features will ensure better resource management in the stadium.
The company collaborated with Axon Enterprise Inc., a leader in public safety technology, to showcase 5G network slicing capabilities in public safety applications. 5G with network slicing capability utilizes a virtualized network to tailor its performance to diverse use cases, optimizing network performance, driving cost efficiency and improving revenue potential.
Verizon also joined forces with Zebra Technologies to launch specialized Zebra mobile devices and software solutions tailored for Verizon Private 5G users. Tablets and computers developed by Zebra are specifically designed for frontline workers across industries like transportation, retail and manufacturing. The devices are equipped with Zebra Mobility DNA software, which facilitates inventory tracking, project management and seamless communication in various work environments.
In the quarter, Verizon deployed its 5G Ultra-Wideband network technology to enhance user experience at the L.A. motor racing event. In addition, it leveraged the network slicing capability to optimize network performance in a high data usage environment. This feature, integrated into Verizon’s standalone 5G core, creates multiple slices of a virtualized network. This facilitated the efficient allocation of network resources and enhanced performance by customizing services according to specific application requirements. These are likely to be reflected in the upcoming quarterly results.
However, adverse foreign currency translations and high operating costs are likely to have led to soft margins in the fourth quarter. In addition, the company’s wireline division is struggling with persistent losses in access lines owing to competitive pressure from the voice-over-Internet protocol service providers and aggressive triple-play (voice, data and video) offerings by cable companies. Consequently, Verizon will record $5.8 billion as a goodwill impairment charge in the Business segment in the fourth quarter.
Our estimate for revenues from the Business segment is pegged at $7,876 million, indicating a decline from $7,900 million reported in the year-ago quarter. Our estimate for operating income from the segment stands at $617 million, suggesting an improvement from $585 million.
Overall Expectations
For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $34,819 million. It reported revenues of $35,251 million in the year-ago quarter. The consensus estimate for adjusted earnings per share stands at $1.07, which suggests a decline from the year-ago tally of $1.19.
Earnings Whispers
Our proven model does not predict 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 not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.54%. 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 companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for Silicon Motion Technology Corporation (SIMO - Free Report) is +4.92% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 6.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +4.58% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 1.
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Will Soft Business Revenues Affect Verizon (VZ) Q4 Earnings?
Verizon Communications Inc. (VZ - Free Report) is scheduled to report fourth-quarter 2023 results before the opening bell on Jan 23. In the quarter, the Business segment is likely to have recorded year-over-year lower revenues owing to a challenging macroeconomic environment.
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 fourth quarter, Verizon completed the deployment of the Express Entry facility at the Bank of America Stadium. It incorporates 5G Edge Accelerated Access technology, which has facial authentication features that precisely authenticate visitor identity and accelerate the ticketing process. Its cloud-based infrastructure reduces the expenses related to on-premise servers.
The automated check-in facility offers nearly real-time, touchless entry into the venue, reducing congestion and delays at the entrance. Along with improving overall safety and security, these advanced features will ensure better resource management in the stadium.
The company collaborated with Axon Enterprise Inc., a leader in public safety technology, to showcase 5G network slicing capabilities in public safety applications. 5G with network slicing capability utilizes a virtualized network to tailor its performance to diverse use cases, optimizing network performance, driving cost efficiency and improving revenue potential.
Verizon also joined forces with Zebra Technologies to launch specialized Zebra mobile devices and software solutions tailored for Verizon Private 5G users. Tablets and computers developed by Zebra are specifically designed for frontline workers across industries like transportation, retail and manufacturing. The devices are equipped with Zebra Mobility DNA software, which facilitates inventory tracking, project management and seamless communication in various work environments.
In the quarter, Verizon deployed its 5G Ultra-Wideband network technology to enhance user experience at the L.A. motor racing event. In addition, it leveraged the network slicing capability to optimize network performance in a high data usage environment. This feature, integrated into Verizon’s standalone 5G core, creates multiple slices of a virtualized network. This facilitated the efficient allocation of network resources and enhanced performance by customizing services according to specific application requirements. These are likely to be reflected in the upcoming quarterly results.
However, adverse foreign currency translations and high operating costs are likely to have led to soft margins in the fourth quarter. In addition, the company’s wireline division is struggling with persistent losses in access lines owing to competitive pressure from the voice-over-Internet protocol service providers and aggressive triple-play (voice, data and video) offerings by cable companies. Consequently, Verizon will record $5.8 billion as a goodwill impairment charge in the Business segment in the fourth quarter.
Our estimate for revenues from the Business segment is pegged at $7,876 million, indicating a decline from $7,900 million reported in the year-ago quarter. Our estimate for operating income from the segment stands at $617 million, suggesting an improvement from $585 million.
Overall Expectations
For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $34,819 million. It reported revenues of $35,251 million in the year-ago quarter. The consensus estimate for adjusted earnings per share stands at $1.07, which suggests a decline from the year-ago tally of $1.19.
Earnings Whispers
Our proven model does not predict 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 not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.54%. 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.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Qualcomm Incorporated (QCOM - Free Report) is set to release quarterly numbers on Jan 31. It has an Earnings ESP of +3.45% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Silicon Motion Technology Corporation (SIMO - Free Report) is +4.92% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 6.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +4.58% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 1.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.