Verizon 3Q Growth Driven by Demand for Wireless and Fios services

NEW YORK – Fueled by wireless and fios connections growth and continued customer loyalty, Verizon Communications reported third-quarter 2015 earnings of 99 cents per share, or $1.04 per share on an adjusted basis (non-GAAP). This compares with EPS of 89 cents in third-quarter 2014. Third-quarter 2015 earnings included a 5 cent per share non-cash charge due to a re-measurement triggered by a pension settlement accounting threshold.

“Verizon continues to grow earnings by delivering network reliability and superior value that continues to attract new customers,” said Chairman and CEO Lowell McAdam. “Verizon Wireless posted another quarter of quality connections growth — even better than in the second quarter — while maintaining high customer loyalty and profitability. Meanwhile, fios customer growth also improved from the previous quarter. We expect future revenue growth from mobile over-the-top video, including digital advertising, and the Internet of Things.”

Verizon’s acquisition of AOL in June is playing a key role in this future growth strategy. In September Verizon launched go90tm, a differentiated, mobile-first social entertainment platform.

In the first nine months of 2015, Verizon invested approximately $22 billion in spectrum licenses and capital for future network capacity, in addition to the $4 billion AOL acquisition. Over that same time, the company maintained its leverage ratio and returned more than $11 billion to shareholders in the form of dividends and share repurchases. Verizon’s Board of Directors increased dividends for the ninth consecutive year in September.

Wireline Financial Highlights

  • In third-quarter 2015, consumer revenues were $4 billion, an increase of 2.8 percent compared with third-quarter 2014. Fios revenues represented 79 percent of the total.

  • Total fios revenues grew 7.5 percent, to $3.4 billion, comparing third-quarter 2015 with third-quarter 2014.

  • Wireline operating income margin was 6.2 percent in third-quarter 2015, up from 2.3 percent in third-quarter 2014. Segment EBITDA margin (non-GAAP) was 23.5 percent in third-quarter 2015, compared with 23.0 percent in third-quarter 2014.


Wireline Operational Highlights

  • In third-quarter 2015, Verizon added 114,000 net new fios Internet connections and 42,000 net new fios video connections. Both are increases from second-quarter 2015. Verizon had totals of 6.9 million fios internet and 5.8 million fios video connections at the end of the third quarter, representing year-over-year increases of 7.2 percent and 5.0 percent, respectively.

  • Fios Internet penetration (subscribers as a percentage of potential subscribers) was 41.7 percent at the end of third-quarter 2015, compared with 40.6 percent at the end of third-quarter 2014. In the same periods, fios video penetration was 35.6 percent, compared with 35.5 percent.

  • By the end of third-quarter 2015, two-thirds of consumer fios Internet customers subscribed to Quantum, which provides speeds ranging from 50 to 500 Mbps. The highest rate of growth is in the 75 Mbps tier, to which one-fourth of Quantum customers subscribe.

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