Verizon Third Quarter Earnings

By Investopedia Staff | October 18, 2012 AAA

Verizon Communications (NYSE:VZ) announced its results for the third quarter on October 18, 2012. Verizon Communications provides communications services.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: How To Decode A Company's Earnings Reports

The Numbers: Though Verizon's EPS fell short of estimates, the company's revenues managed to trump predictions. The company reported adjusted net income of 64 cents per share versus the 68 cents per share estimate and revenues of $29.01 billion versus the $28.56 billion estimate. Revenue climbed 3.9% from the same period last year. Verizon's revenue has grown during each of the past four quarters on a year-over-year basis. Verizon reported net income of $429.2 million during the third quarter. This is 21.2% higher than the year-ago quarter.

Management Quote: "In the third quarter, Verizon continued to deliver double-digit earnings growth and strong cash generation, and we remain solidly on track to meet our financial objectives for the year," said Lowell McAdam, Verizon chairman and CEO. "With our 4G LTE network advantage, well-received Share Everything Plans and unmatched product portfolio, Verizon Wireless continues to do an outstanding job of balancing growth and profitability. Wireless achieved record profitability in a quarter in which we reported the highest number of retail postpaid gross and net adds in four years."

Looking Ahead: Over the last 30 days, analysts have not been optimistic about the company's next-quarter performance. The average estimate for the fourth quarter is now 59 cents per share, down from 62 cents. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved down from $2.50 a share to $2.49 over the last seven days.

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