The last quarter's financial statements highlight the potential of the top telecommunication company.
On Thursday morning, January 21, 2016, Verizon Communications Inc. reported its earnings for the 4th and last quarter of 2015. The top telecommunication outperformed in the last quarter and met the Street’s expectations.
The company, which is headquartered in New Jersey, declared $0.88 earnings per share –0.01% more than the speculated amount and reported a 25% increase in EPS as compared to last year’s (4Q14: around 70 cents). The company’s Chairman and CEO, Lowell McAdam was confident on the company’s performance and said that the company has generated balanced result amidst the strong competition. Furthermore, the CEO said that the company looks forward to perform better in the coming year as it has attained and built next generation network capabilities that position the pioneer in the digital-first mobile world in 2016.
The US based company also surprised the analysts when it managed a net addition of 1.5 million customers in the last quarter. Moreover, the organization’s rate of customer’s attrition, or defection, fell down to 0.96% -significantly better as compared to last year’s 1.14%.
For the year quarter, the company reported revenue of $34.3 billion –a 3.2% increase as compared to the last year’s same quarter. In comparison with last year’s same quarter loss of $2.2 billion, the carrier generated a profit of $5.4 billion in the last quarter.
The New Jersey giant has expanded its horizon and invested in lot of different ventures in order to generate more revenue for the company. The organization has made an investment of $28 billion in spectrum licenses and capital for future network capacity. Moreover, the company spent $4 billion in acquisition of AOL Inc. in an attempt to create a digital advertising business.
The top performing telecommunication company views the acquisition of AOL Inc. and Millennial Media as a prudent step that will strengthen company’s capabilities of developing and introducing high-tech applications to its customers. For example, last year, the company has launched a mobile video app with a name of “go90.” Also, it looks forward to develop technology platform for new machine-related businesses.
Because of the new incentives which the company is looking into, the company believes that the coming year will be a tough one. Verizon’s CEO, Fran Shammo expressed his views and told the analysts that just like any new business which initially withstood losses and then gradually begins making profit, Verizon too will have a hard time in executing its new plans and strategies. He commented that he believes go90 will take a few years to generate higher returns for the company. Reportedly, the video app has managed to gain 2 million downloads since its launch in October but no official statement was given by Verizon to verify its active monthly users.
Without a doubt, the company has gone under a transformational change in 2015 and it is highly probable that in 2016 Verizon will be set out to the road of success.
The Verizon stock price stood at $45.87 –an increase of almost 3.3% at the marked which closed on Thursday.
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