Growth from IoT; 640K postpaid additions, according to Verizon Q1 earnings report
Amid an ongoing union strike, the Verizon Q1 2016 earnings report indicates small year-over-year with operating revenues of $32.2 billion, which is a 0.6% increase compared to Q1 2015.
In its earnings call, Verizon highlighted growth in its Internet of Things (IoT) business, which came in with $195 million in Q1 revenue, a year-over-year increase of 25%.
Operating cash flow in Q1 was $7.4 billion. According to the company, “This compares with $10.2 billion in last year’s first quarter, which included $2.4 billion related to a one-time transaction to monetize wireless tower assets.” The company projects consolidated capex between $17.2 billion and $17.7 billion in 2016.
Specific to the wireless business, Verizon reported 640,000 retail postpaid net additions in Q1, which the company called a “seasonally low-volume quarter.” At then end of Q1 2016, Verizon had 112.6 million retail connections, up 3.7% year-over-year, and 107.2 million retail postpaid connections, a 4.4% increase year-over-year. Verizon Q1 churn was 0.96%.
Verizon has a lot going on at the moment. In addition to the 36,000 striking employees in the Mid-Atlantic and Northeast, the company is widely regarded as the frontrunner for a potential acquisition of Yahoo, with analysts estimating the purchase price at $4 billion to $8 billion.
Yahoo is seen as an asset that will complement Verizon’s $4.4 billion AOL acquisition. By combining the two businesses, Verizon would increase its bargaining power with advertisers as it works to grow its digital media and mobile video business.
As for the strike, Brooklyn-based field tech Anthony Finocchio said: “Verizon’s Q1 earnings show starkly how the company’s misguided priorities and scattershot approach to business are hurting customers and the company’s standing on Wall Street. Despite making $39 billion profits over the last three years and $4.43 billion in the first quarter of 2016 alone, the company is refusing to settle a fair contract and continues its efforts to offshore jobs to the Philippines, Mexico and other locations. Rather than investing in good jobs here at home, Verizon refuses to make FiOS available to thousands of people in towns and cities throughout the East Coast and is embarking on a questionable path to acquire troubled Yahoo and other companies. The value of the Yahoo deal alone would cover the cost to fulfill Verizon’s commitment to New York and complete the Boston buildout with billions left over. My co-workers and I want nothing more than to help our customers get the service and quality they want and deserve and provide for our own families. By settling a fair contract that protects good jobs in our communities, Verizon can reestablish itself as a company that values its customers and invests in its own long-term strength and success.”
