Verizon Communications Inc. (VZ) posted third quarter earnings on Oct 17, and the telecom giant exceeded Wall Street estimates on strong American wireless sales. The earnings beat follows the agreement of a blockbuster deal in September between Verizon and Vodafone plc (VOD) wherein Verizon buys out Vodafone’s 45 percent share in their wireless division for $130 billion.
The Global Telecom Shuffle
The biggest telecom companies on the planet have been divvying up markets since the Vodafone-Verizon deal. With the deal, Verizon has let enterprise and wireline dwindle while focusing on becoming the leader in American wireless, a division that now accounts for 67 percent of their revenue and the majority of their growth.
Other telecoms have followed suit, attempting to carve out their own niche. Vodafone will most likely take over Verizon’s stake in Italian wireless. In turn, several players have been jockeying for some time over the fate of Italian telecom Telecom Italia Spa (TI) , who have a major foothold in the burgeoning Latin American market.
Verizon is the largest cellular provider in the US, and looks to continue focusing the majority of their business in that market and stave off rivals T-Mobile US Inc. (TMUS) , who is looking to improve its 4G network in the US, and AT&T Inc. (T) who is eyeballing expansion into Europe.
The company added 927,000 wireless subscribers, and sold 7.6 million smartphones for Apple Inc. (AAPL) . While the subscriber numbers were down, the company beat revenues and earnings estimates slightly, boding well as they move into the traditionally higher-cost holiday season.
For the third fiscal quarter, Verizon reported net income of $2.2 billion, or $0.77 per share, versus the $1.59 billion, or $0.56 per share, from the same period a year ago. Revenue for the quarter was $30.28 billion, as compared to $29.01 billion from the previous year. Analysts were expecting a profit of $0.73 per share on revenues of $30.16 billion.
Verizon was up in midday trading, gaining 3.32 percent to hit $48.82 a share.