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Verizon (VZ) Q3 Earnings on Deck as It Announces Partnership with Disney (DIS)
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Verizon (VZ - Free Report) is set to report its third quarter results before the opening bell Friday, October 25. The telecommunications giant has seen its shares rise 8.7% in 2019, underperforming the S&P 500’s 17% gain. The company recently announced that it would be working with Disney (DIS - Free Report) to give some of its members a one-year free trial of the upcoming streaming service, Disney+.
The move comes as Disney tries to lock in new users before the official launch of their streaming service on November 12. How will this new partnership play out for the two companies and how might Verizon report their Q3?
Verizon Teams Up with Disney
Disney is making moves to garner users as it prepares to officially launch its streaming service that will compete with the likes of Netflix (NFLX - Free Report) and HBO Go, a subsidiary of AT&T’s (T - Free Report) Time Warner. Disney realizes that traditional TV is moving online to streaming platforms and instead of licensing out their content to other streaming services, Disney would rather create its own platform and control the users experience.
Verizon is only offering the free year to select groups of customers like its unlimited wireless customers, as well as new Fios Home Internet and new 5G Home Internet accounts. The offer would motivate current valued Verizon customers to stay with the company longer, and it would also bring millions of new accounts to Disney’s service, which would help them build a solid user base.
The partnership with Verizon isn’t the only move Disney has made to lock in users before its service’s launch. In the past few weeks, Disney has announced that it would offer members of its D23 fan club, credit card accounts, and theme-park annual pass holders the ability to prepay for two, and in some cases three years of service at a deep discount.
Outlook
The conglomerate has been aggressive in its approach towards recruiting subscribers because its targeting between 60 million and 90 million Disney+ subscribers by the end of fiscal 2024. Verizon’s partnership with Disney to offer its service shows the wireless provider’s interest in keeping its consumer satisfied.
Verizon CEO, Hans Vestberg, stated "Giving Verizon customers an unprecedented offer and access to Disney+ on the platform of their choice is yet another example of our commitment to provide the best premium content available through key partnerships on behalf of our customers.”
Our Q3 consensus estimates project earnings to pop 1.64% to $1.24 per share while sales are expected to see a slight increase of 0.33% to $32.71 billion. Total wireless revenue is expected to bring in $23.4 billion for a 2.02% gain and wireline sales are forecasted to reach $7.1 billion falling 3.67% from the year ago quarter. Fiscal 2019 estimates anticipate earnings to grow 2.12% to $4.81 per share on the back of 0.33% sales growth of $131.3 billion. Wireless revenue is projected to grow 2.1% and wireline is forecasted to fall 3.84%.
Bottom Line
Verizon’s new relationship with Disney allows it to provide its consumers with an added perk while Disney gets its service out to users, but time will tell whether the consumers renew their subscriptions after the year ends. Disney’s aggressive tactics to garner a sound user base reflects its ambitions of establishing themselves in the booming streaming market.
Verizon’s goal of integrating its 5G network with its nationwide 4G network is also a step in the right direction as a new computing revolution approaches. Verizon currently trades below its industry average but it often fluctuates, making the current valuation an opportune entry point for investors feeling bullish about the telecommunication giant. Verizon currently sports a Zacks Rank #2 (Buy) as its estimate revisions have trended higher over the past 90 days.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Verizon (VZ) Q3 Earnings on Deck as It Announces Partnership with Disney (DIS)
Verizon (VZ - Free Report) is set to report its third quarter results before the opening bell Friday, October 25. The telecommunications giant has seen its shares rise 8.7% in 2019, underperforming the S&P 500’s 17% gain. The company recently announced that it would be working with Disney (DIS - Free Report) to give some of its members a one-year free trial of the upcoming streaming service, Disney+.
The move comes as Disney tries to lock in new users before the official launch of their streaming service on November 12. How will this new partnership play out for the two companies and how might Verizon report their Q3?
Verizon Teams Up with Disney
Disney is making moves to garner users as it prepares to officially launch its streaming service that will compete with the likes of Netflix (NFLX - Free Report) and HBO Go, a subsidiary of AT&T’s (T - Free Report) Time Warner. Disney realizes that traditional TV is moving online to streaming platforms and instead of licensing out their content to other streaming services, Disney would rather create its own platform and control the users experience.
Verizon is only offering the free year to select groups of customers like its unlimited wireless customers, as well as new Fios Home Internet and new 5G Home Internet accounts. The offer would motivate current valued Verizon customers to stay with the company longer, and it would also bring millions of new accounts to Disney’s service, which would help them build a solid user base.
The partnership with Verizon isn’t the only move Disney has made to lock in users before its service’s launch. In the past few weeks, Disney has announced that it would offer members of its D23 fan club, credit card accounts, and theme-park annual pass holders the ability to prepay for two, and in some cases three years of service at a deep discount.
Outlook
The conglomerate has been aggressive in its approach towards recruiting subscribers because its targeting between 60 million and 90 million Disney+ subscribers by the end of fiscal 2024. Verizon’s partnership with Disney to offer its service shows the wireless provider’s interest in keeping its consumer satisfied.
Verizon CEO, Hans Vestberg, stated "Giving Verizon customers an unprecedented offer and access to Disney+ on the platform of their choice is yet another example of our commitment to provide the best premium content available through key partnerships on behalf of our customers.”
Our Q3 consensus estimates project earnings to pop 1.64% to $1.24 per share while sales are expected to see a slight increase of 0.33% to $32.71 billion. Total wireless revenue is expected to bring in $23.4 billion for a 2.02% gain and wireline sales are forecasted to reach $7.1 billion falling 3.67% from the year ago quarter. Fiscal 2019 estimates anticipate earnings to grow 2.12% to $4.81 per share on the back of 0.33% sales growth of $131.3 billion. Wireless revenue is projected to grow 2.1% and wireline is forecasted to fall 3.84%.
Bottom Line
Verizon’s new relationship with Disney allows it to provide its consumers with an added perk while Disney gets its service out to users, but time will tell whether the consumers renew their subscriptions after the year ends. Disney’s aggressive tactics to garner a sound user base reflects its ambitions of establishing themselves in the booming streaming market.
Verizon’s goal of integrating its 5G network with its nationwide 4G network is also a step in the right direction as a new computing revolution approaches. Verizon currently trades below its industry average but it often fluctuates, making the current valuation an opportune entry point for investors feeling bullish about the telecommunication giant. Verizon currently sports a Zacks Rank #2 (Buy) as its estimate revisions have trended higher over the past 90 days.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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