Yahoo Finance Verizon CEO on the company's sturdy, solid quarter
If this is what the 5G era looks like, Verizon (VZ) shareholders hope it never ends.
Verizon, parent company of Yahoo Finance, posted sturdy quarterly results on Tuesday, propelling the stock up over 4% in an otherwise negative session on Wall Street.
“All in all it was a solid quarter,” Verizon CEO Hans Vestberg told Yahoo Finance in an interview. “We were pleased with the wireless performance, [but] there were also some challenges.”
The telco giant posted recurring earnings of $1.22 beating consensus Street estimates by three cents. Traders were also impressed by gains in subscriber growth (up 295k) in a highly competitive market, as well as the overall wireless business. That and an absence of any major negatives accounted for Verizon’s trading higher on a day when other high-profile companies such as 3M and Caterpillar posted disappointing numbers and were off sharply.
Revenues in Verizon’s Oath media group fell some 7% and its wireline business declined as well, but not more than expected.
As for the companies nascent 5G rollout, Vestberg said it was too early to get much of a read, but that it was proceeding apace.
Because Verizon’s business is mostly in the U.S.—with little foreign trade, supply chain or raw materials exposure—and that its stock sports a high dividend yield (4.38%), also probably added to investors viewing Verizon’s shares favorably today.
Cost containment matters to investors of course and here too Verizon appears to have delivered.
I asked Vestberg about capital expenditure and layoffs. Regarding capex: “I think that what we had the guidance on the beginning of the year of spending capex of $17 billion to $17.8 billion US a year,” the CEO said. “We talked in the second quarter we are going to end up in the lower range. Now we are actually here in the third quarter, we’re actually going to lower it to $16.6 to $17.”
As for layoffs: “We launched earlier in third quarter, a voluntary program for certain management employees. We’re in the midst of that. We cannot really say how many that have accepted because it’s a volunteer program, so you have to accept it, and we as an employer, we need to approve it. And that process will end later on in November.”
I also asked Vestberg about with the blending of media and distribution, if the idea of a telco category was antiquated. Is Verizon therefore in a category of one?
“I think that we are. We hit an inflection point in the industry a couple of years ago when we realized that the traditional telephony is just a very small service, (when you call each other.) You don’t do that anymore, almost,” Vestberg said. “And you use the network for data. And that, of course, opened up a wide array of possibilities for any carrier in the world. So that goes for us, and it goes for our competitors.
“But you can also take very different strategies in that sort of environment. And we are taking ours. We build it on a strong network. We’re partnering with a lot, we have a lot of great short form and live streaming from our Oath channels. So, I think we are building our assets based on what we think we can do the best for our shareholders and employees and our customers.”
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Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter @serwer
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