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Verizon Communications Inc VZ

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Verizon Bounces Back in Q2 With Solid Customer Gains; Shares Fairly Valued

Analyst Note

| Michael Hodel, CFA |

Verizon Communications posted solid second-quarter results, with customer metrics rebounding largely as expected from a soft start to the year. Revenue growth benefited from an easy comparison versus the worst of the pandemic impact a year ago and a step up in wireless customer retention efforts during the quarter. Management increased its wireless service revenue growth forecast for the full year, but Verizon continues to generally track our expectations. We don’t expect to materially change our $57 fair value estimate.

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Company Profile

Business Description

Verizon is now primarily a wireless business (more than 70% of revenue and nearly all operating income). It serves about 91 million postpaid and 4 million prepaid phone customers and connects another 25 million data devices, like tablets, via its nationwide network, making it the largest U.S. wireless carrier. The firm has agreed to acquire Tracfone, a wireless reseller that serves about 20 million prepaid customers in the U.S., from America Movil. Fixed-line telecom operations include local networks (12% of revenue) in the Northeast, which reach about 25 million homes and businesses, and nationwide enterprise services (10%). Verizon Media Group, the online media and advertising firm formed with the acquisitions of AOL and Yahoo, provides the remainder of revenue.

Contact
1095 Avenue of the Americas
New York, NY, 10036
T +1 212 395-1000
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 132,200

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