ii view: Verizon rallies as profit breaks record

Second-quarter results to 30 June

• Revenue down 0.7% to $34.3 billion (£25.7 billion)
• Adjusted profit (EBITDA) up 7.2% to $13.7 billion
• Adjusted earnings per share up 6.6% to $1.30 per share
• Quarterly dividend of 70.75 US cents per share, unchanged from Q1
• Unsecured debt up 14% to $136.5 billion 

Guidance:

• Expects total mobile and broadband service revenue growth approaching 3% in Q3 2026 and approximately 4% in Q4 – up from growth of 2.8% this quarter
• Expects year-over-year growth in adjusted full-year earnings of 6% to 7%, up from a previous 4% to 5%

Chief executive Dan Schulman said:

“Our second-quarter results provide clear, compelling evidence that our transformation is driving a structural inflection point across our entire business.”

• Invest with ii: Buy US Stocks & Shares | US Earnings Season | Interactive investor Offers

ii round-up:

Verizon Communications Inc (NYSE:VZ) today reported record adjusted quarterly profit as the telecoms giant talked about an ignition of growth under head Dan Schulman who joined in October 2025.

Adjusted profit (EBITDA) of $13.7 billion was up 7.2% from a year ago, pushing adjusted earnings up 6.6% to $1.30 per share. Total revenues fell 0.7% from a year ago to $34.3 billion, hurt by falling equipment sales as many consumers persisted with existing mobile phones.

Shares in the Dow Jones company rose 2% in US trading having come into these latest results up by close to a tenth so far in 2026. That’s similar to the Dow itself. Rivals AT&T Inc (NYSE:T) and T-Mobile US Inc (NASDAQ:TMUS) are down 8% and 16% respectively year-to-date.

Verizon serves retail and business customers, connecting around 147 million mobile phones and operating 17.1 million broadband connections.

Management expects growth in total mobile and broadband service revenues of around 3% and 4% respectively for Q3 and Q4 this year. That’s potentially up from growth of 2.8% during this latest quarter.

Adjusted earnings per share for the full year are forecast to grow by between 6% and 7%, up from a previous estimate of 4-5%.

A previously announced quarterly dividend payment of 70.75 US cents per share, payable to eligible shareholders on 3 August, is unchanged from the prior first quarter, and feeds into total shareholder returns of $9.4 billion during H1.

ii view:

Previously Bell Atlantic, Verizon today employs around 90,000 people. Retail or consumer related revenues were the biggest during 2025 at just over three-quarters, with business related sales accounting for the balance. Previous group action has included outsourcing or leasing its more than 6,000 mobile phone towers across the USA to infrastructure firm Vertical Bridge, as well a $20 billion deal to buy broadband provider Frontier.

For investors, squeezed consumer incomes and an arguable lack of recent mobile phone innovation have seen equipment sales falling during this latest period. Industry competition remains intense with business customers likely to be watching every dollar spent. A forecast price/earnings (PE) ratio above the three-year average may suggest the shares not obviously cheap, while the group’s total debt of $136.5 billion compares to a stock market value of $183 billion.

• Where to invest in Q3 2026? Four experts have their say
• Q1 results underline that transforming BT is ‘a marathon, not a sprint’
• Six stocks that could double their dividend quickly

On the upside, group initiatives such as customer price locks have attracted new business, helping operational performance, and therefore assisting finances. AI-powered innovations are expected to help personalise customer service. Acquisitions, such as the group’s previous deal to buy broadband provider Frontier, have aided growth, while the pandemic arguably added to the need for fast data from more locations.

On balance, and despite continuing risks, sizeable cashflows support a dividend yield of over 6%, leaving the shares of ongoing interest to both income seekers and those wanting capital growth.

Positives

• Focus on costs
• Attractive dividend (not guaranteed)

Negatives:

• High competition
• Total debt of $136.5 billion

The average rating of stock market analysts:

Strong hold