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What Do Experts Say About Verizon Communications Inc. (VZ)’s Earnings Report?

Verizon Communications Inc. (NYSE:VZ) has reported its fourth quarter and full year earnings report earlier today. Verizon Communications Inc. (NYSE:VZ) stock has fell by more than 1.5% in the after-hours, which might be due to miss on expectation for EPS number. CNBC’s David Faber talked on CNBC about Verizon Communications Inc. (NYSE:VZ)’s earnings report and his opinion on the stock going further into 2015.

Verizon Communications Inc. (NYSE:VZ)

Faber said that the earnings numbers from Verizon Communications Inc. (NYSE:VZ) is OK, if not bad. Some key figures from earnings report included EPS and revenue of $0.71 and $33.2 billion for the fourth quarter, with EPS missing the consensus by 2 cents and revenues beating the consensus by $530 million. The carrier network also reported a net post-paid customer addition of around 2 million during the fourth quarter, which beat the street’s expectations as well.

Faber said that the postpaid subscriber addition was good news for the company since it was ahead of the consensus. But he feels that the main concern was EBIDTA margins which was reported as 42%. He added that many analysts were expecting EBIDTA margins to be around 43.5% or 43.8%. He said that Verizon Communications Inc. (NYSE:VZ) has increased its Capex though during the quarter. He added that Verizon Communications Inc. (NYSE:VZ) stock was trading around 1.7% lower in the after-hours.

“[…] Revenue number not bad, […] addition of new subscribers was better, but a little concern around EBIDTA margins. At this point they are trending in the right way. Capex perhaps seen as a good sign, but you really have this overhang of the spectrum auction,” Faber said.

He added that the overhang surrounding spectrum auction is seen as a concern for a lot of telecommunication company, including Verizon Communications Inc. (NYSE:VZ). Faber said that there are a lot of speculations around the spectrum auctions, which might end anytime in the next week. He pointed out that there were $45 billion during the auction and Citigroup suggested that Verizon Communications Inc. (NYSE:VZ) had spent around $15 billion and AT&T Inc. (NYSE:T) had spent around $5.8 billion. But some speculations say that Verizon Communications Inc. (NYSE:VZ) might have spent lower than that and AT&T Inc. (NYSE:T) might have spent a bit higher.

He feels that if Verizon Communications Inc. (NYSE:VZ) had spent lower in the auction, they might need to do few more spending to expand.

Disclosure: None

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