Seeking Alpha - Verizon Q2 preview: Eyes on full-year guidance amid declining consumer spending environment
Verizon (NYSE:VZ) is scheduled to announce Q2 earnings results on Friday, July 22nd, before market open.
The consensus EPS Estimate is $1.33 (-2.9% Y/Y) and the consensus Revenue Estimate is $33.8B (flat Y/Y).
The telecom giant reported a mixed Q1 earnings report that included a cutback to its full-year revenue expectations. It was the first time since 2019 that Verizon (VZ) failed to report earnings that clearly beat expectations. Revenue ticked up just over 2% from a year ago to $33.6B.
Verizon (VZ) now sees service and other revenue flat for the year compared prior expectations for 1% to 1.5% growth. The company also reduced expectations for wireless service revenue growth, and said earnings per share and would be at the low end of its prior estimate range.
Shortly before the earnings report, Verizon (VZ) initiated a price hike of $6 to $12 on its metered-data plans and has increased a portion of its monthly fees on wireless plans. The price hike follows industry trends in terms of price hikes amid inflationary pressures.
BofA Securities expects Verizon (VZ) to update investors on how these price hikes will impact H2 results and full year guidance. It also expects Verizon to reiterate 2022 guidance for revenue, adjusted EBITDA and adjusted EPS growth.
Meanwhile, Scotiabank expects more subdued results for Q2, and 2022 guidance will be an area of focus amid a deteriorating consumer spending environment and inflationary pressures. It believes that Verizon may tweak its guidance due to inflation and lower growth in consumer revenues.
In broadband, Scotiabank expects fixed wireless to show continued strong uptick while wireline broadband will see continued weaker Y/Y loading. Verizon's acquisition of Tracfone expands its appeal in the prepaid market but it is still dealing with the integration and an elevated customer churn during the transition.
Over the last 2 years, Verizon has beaten EPS estimates 100% of the time and has beaten revenue estimates 63% of the time.
Over the last 3 months, EPS estimates have seen 0 upward revisions and 17 downward. Revenue estimates have seen 4 upward revisions and 11 downward.