Earnings Preview: Verizon to report 2Q results
Verizon to report 2nd-quarter results amid wireless deal-making frenzy
NEW YORK (AP) -- Verizon Communications Inc., parent of the country's biggest wireless carrier, is due to report its results for the April-to-June period on Thursday amid speculation that a buyout of Verizon Wireless' minority shareholder is drawing closer.
WHAT TO WATCH FOR: Verizon Communications has been open about its desires to buy out Vodafone Group PLC, the UK company that owns 45 percent of Verizon Wireless. There's been renewed speculation that a deal could happen this year due to low interest rates and a strong dollar, and analysts will be listening for clues from executives on the conference call that follows the earnings report.
Verizon CFO Fran Shammo said a month ago that the company is also looking at entering the Canadian wireless market.
The lower ranks of the wireless industry are in a ferment of deal-making. No. 2 AT&T just announced a deal to buy Leap Wireless, T-Mobile bought MetroPCS, and Sprint has sold control to Japan's Softbank. Verizon alone has not been part of any major deal.
The net number of new wireless devices on contract-based plans is an important measure for cellphone companies, but the quarter saw no big new device launches, and is likely to be a muted. Michael Rollins at Citigroup said he expects Verizon to report adding a net 800,000 new devices. That would be less than the 888,000 added in the same quarter last year, but still an industry-beating figure.
WHY IT MATTERS: Verizon Wireless sends out bills for 98.9 million wireless devices, and there are millions more on the network through wholesale access deals. Verizon Communications still has 22.2 million landlines as well. The stock is a component of the 30-stock blue-chip Dow Jones industrial average.
Verizon's report marks the debut for telecommunications companies this earnings season. Rival AT&T Inc. reports next week.
WHAT'S EXPECTED: Analysts polled by FactSet on average expect Verizon to report earnings of 72 cents per share on revenue of $29.81 billion.
LAST YEAR'S QUARTER: Verizon earned 64 cents per share in the second quarter of 2012. Revenue was $28.55 billion.
