ii view: Verizon upgrades earnings for third quarter in a row

Third-quarter results to 30 September

• Revenue up 1.5% to $34.3 billion (£25.7 billion)
• Adjusted profit (EBITDA) up 8% to $13.8 billion
• Adjusted earnings per share up 8.3% to $1.31 per share
• Quarterly dividend of 70.75 US cents per share, unchanged from Q2
• Unsecured debt up 12% to $123.7 billion

Guidance:

• Now expects year-over-year growth in annual adjusted earnings of 7-7.5%, up from a previous 6-7%

Chief executive Dan Schulman said:

“Verizon is fundamentally stronger — operationally, financially, and competitively, as we continue building a multi-year growth story.”

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ii round-up:

Telecoms giant Verizon Communications Inc (NYSE:VZ) today raised full-year estimates for the third consecutive quarter, reporting earnings that beat Wall Street expectations.

A 1.5% increase in third-quarter revenues from a year ago to $34.3 billion pushed adjusted earnings per share up 8.3% to $1.31 per share. Analysts had expected $34.8 billion and $1.27 respectively.

Shares in the Dow Jones company fell 3% 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 16% and 28% respectively year-to-date.

Verizon serves retail and business customers, connecting around 147.1 million mobile phones and operating 17.4 million broadband connections.

Management now expects postpaid net mobile phone adds of 1.1 million to 1.2 million for the full year, up from a previous upper half of 750,000 to 1 million.

As such, expected growth in adjusted annual earnings rises to between 7% and 7.5%, up from a previous 6% to 7% forecast.

Under head Dan Schulman, Verizon is now one year into a performance improvement plan. Quarterly adjusted profit (EBITDA) of $13.8 billion, up 8% year-over-year, was the group’s highest ever.

A previously announced quarterly dividend payment of 70.75 US cents per share, payable to eligible shareholders on 2 November, is unchanged from the second quarter and feeds into total shareholder returns of $12.8 billion during the nine months to late September – an increase of 49% year-over-year.

Unsecured Verizon net debt rose 12% from a year ago to $123.7 billion.

ii view:

Formerly Bell Atlantic, Verizon today employs around 90,000 people. Retail or consumer related revenues were the biggest in 2025 at just over three-quarters, with business related sales accounting for the balance.

For investors, squeezed consumer incomes and an arguable lack of recent mobile phone innovation likely underpinned a 9% fall in equipment sales in this latest quarter. Industry competition remains intense, with business customers likely watching costs closely and satellite operator Space Exploration Technologies Corp Class A (NASDAQ:SPCX) recently refencing a potential new communications service. A forward price/earnings (PE) ratio above the three-year average may suggest the shares are not obviously cheap, while the group’s total debt of $166.2 billion compares to a stock market value of $185.4 billion.

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More favourably, group initiatives such as customer price locks have attracted new business, driving its best Q3 mobile adds performance in five years. AI 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 has arguably added to the need for fast data from more locations.

In all, and despite ongoing risks, sizeable cashflows supporting a forecast dividend yield above 6% leave the shares of continuing interest to income investors.

Positives

• Focus on costs
• Attractive dividend (not guaranteed)

Negatives:

• Intense competition
• Total debt of $166.2 billion

The average rating of stock market analysts:

Strong hold