Verizon Q3 Preview: Looking For Updates On Postpaid Business, 5G Rollout

by Trefis Team
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Verizon (NYSE:VZ) is expected to publish its Q1 2018 results on October 23, reporting on a quarter that likely saw the company sustain the momentum in its bread-and-butter postpaid phone business. Below we take a look at some of the key factors we will be watching when the company publishes results Tuesday.

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

Postpaid Wireless Business Could Gather Steam

Verizon’s postpaid phone subscriber base grew by 199k over Q2, compared to a loss of roughly 24k customers in the previous quarter, driven by the continued uptake of the company’s unlimited data plans. It’s likely that the performance over Q3 remained strong, driven partly by the launch of new ultra-premium smartphones including the iPhone XS Max and the Galaxy Note 9. Churn levels could also remain low, driven by a greater number of devices (such as the Apple Watch LTE) on device plans. Revenue growth should also pick up, driven by higher equipment sales and a turnaround in wireless service revenue growth. The company has guided for revenue growth of low-to-mid single digits this year, up from a low-single-digit outlook back in April.

Updates On The 5G Rollout

Unlike its rivals, Verizon has been staying away from high-profile M&A activity, instead choosing to focus on improving on its best-in-class wireless network. The company is investing heavily in the 5G space, launching the first commercial deployment of 5G in the United States earlier this month. The new fixed wireless broadband services went live in Los Angeles, Houston, Indianapolis, and Sacramento earlier this month, offering peak speeds of as much as 1 gigabit per second. While it’s likely that the service will remain relatively niche until more mainstream mobile-focused deployments begin, we will be looking for updates on how the service is faring thus far.

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