Verizon Communications Inc. (NYSE: VZ) reported its second-quarter financial results before the markets opened on Tuesday. The company believes that the results from this report are demonstrating its evolving operations and advancing strategy that will sustain network leadership. Keep in mind that this is one of the best-performing Dow stocks in 2016 and that it recently entered into an acquisition agreement with Yahoo! Inc. (NASDAQ: YHOO).
The company said that it had $0.94 in earnings per share (EPS) on $30.5 billion in revenue. Consensus estimates from Thomson Reuters had called for $0.92 in EPS on revenue of $30.94 billion. In the same period of last year, it posted EPS of $1.04 and $32.22 billion in revenue.
New revenue streams from IoT (Internet of Things) continue to grow, with revenues of approximately $205 million in second-quarter 2016, a year-over-year increase of about 25%.
Verizon reported 615,000 retail postpaid net additions in second-quarter 2016. These net adds exclude wholesale device and wholesale IoT connections. At the end of the second quarter, Verizon had 113.2 million retail connections, a 3.3% year-over-year increase. Verizon’s industry-leading retail postpaid connections base grew 3.9% to 107.8 million, and prepaid connections totaled 5.4 million.
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In terms of FiOS, Verizon had net declines of 13,000 internet connections and 41,000 FiOS video connections in this quarter. Verizon made significant progress in working through a backlog of FiOS installations in June and has since returned to its normal run rate of FiOS connection growth.
The company also recently announced it entered into a definitive agreement to acquire Yahoo’s operating business for about $4.8 billion. The transaction is expected to close in first-quarter 2017.
Lowell McAdam, chairman and chief executive of Verizon, commented on earnings:
By acquiring Yahoo, we are scaling up to be a major competitor in mobile media. Yahoo is a complementary business to AOL, giving us market-leading content brands and a valuable portfolio of online properties and mobile applications that attract over 1 billion monthly active consumer views. We expect this acquisition to put us in a great position as a top global mobile media company and give us a significant source of revenue growth for the future.
Cash flows from operating activities totaled $5.4 billion in second-quarter 2016. On the books, Verizon’s cash, cash equivalents and short-term investments totaled $2.86 billion at the end of the quarter, versus $4.82 billion at the end of 2015.
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Shares of Verizon closed Monday at $55.87, with a consensus analyst price target of $53.24 and a 52-week trading range of $38.06 to $56.95. Following the release of the earnings report, the stock was down about 1% at $55.30 in early trading indications Tuesday.
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