What To Watch As Verizon Reports Q2 Results

by Trefis Team
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Verizon (NYSE:VZ) is scheduled to publish its Q2 2018 results on Tuesday, July 24. In this note, we take a look at some of the key metrics we will be tracking in the company’s earnings release.

We have created an interactive dashboard analysis which outlines our expectations for the company for 2018. You can modify the key drivers to arrive at your own price estimate for Verizon’s stock.

Postpaid Phone Adds In Focus

While we expect the company’s overall postpaid base to grow, driven by connected devices, the postpaid phone figure will be a crucial metric to watch. During Q1, while Verizon’s overall postpaid subscriber base grew by 260k, the company actually lost 24k postpaid phone customers, which are typically more lucrative for wireless carriers. It’s possible that the metric could see some improvement in Q2, driven by relatively compelling equipment promos on top-end devices such as the iPhone X and Galaxy S9. We will also be tracking the progress of the company’s prepaid business, which has been seeing an improving retail footprint and higher data attach rates.

ARPU, Margins

We expect Verizon’s ARPU to remain relatively sluggish, as unlimited plans put a cap on overage fees and limit revenue upside from high-value customers. The company’s overall service revenues are also likely to continue their descent, due to the shift to unsubsidized plans. However, the company has indicated that it expects to post positive service revenue growth on a reported basis towards the end of this year. Verizon’s wireless margins could remain relatively flat over the quarter, due to the aforementioned ARPU pressure.

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