Verizon reports strong 1Q operational performance, while raising earnings guidance for full-year 2019

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1Q 2019 highlights


  • $1.22 in earnings per share (EPS), compared with $1.11 in 1Q 2018; adjusted EPS (non-GAAP) of $1.20, excluding a special item, compared with $1.17 in 1Q 2018.
  • Total consolidated revenue growth of 1.1 percent year over year, to $32.1 billion.


  • 61,000 retail postpaid net additions, including 174,000 postpaid smartphone net additions.
  • Retail postpaid churn of 1.12 percent, and retail postpaid phone churn of 0.84 percent.
  • Service revenue growth of 4.4 percent year over year.
  • Total revenue growth of 3.7 percent year over year to $22.7 billion.


  • 52,000 Fios Internet net additions; Fios total revenue growth of 3.6 percent year over year.

NEW YORK - As the 5G mobility era begins, Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported first-quarter 2019 results highlighted by continued wireless service revenue growth and strong earnings per share.

 “Verizon began 2019 by extending our leadership position in 4G, driving innovation in 5G and expanding our high-valued customer relationships,” said Chairman and CEO Hans Vestberg. “2019 is shaping up to be an exciting year for Verizon. We are leading the world in the development of new technologies with the launch of our 5G Ultra Wideband network. Our ambition remains unchanged to provide the most advanced next-generation networks in the world.”

For first-quarter 2019, Verizon reported EPS of $1.22, compared with $1.11 in first-quarter 2018. On an adjusted basis (non-GAAP), first-quarter 2019 EPS was $1.20, excluding a special item, compared with adjusted EPS of $1.17 in first-quarter 2018. Verizon’s first-quarter 2019 EPS included a 2 cent benefit due to a pension re-measurement triggered by the company's Voluntary Separation Program.

In first-quarter 2019, Verizon faced headwinds as a result of a reduction in benefits from the adoption of a revenue recognition standard, primarily due to the deferral of commission expense, and the adoption of a lease accounting standard. The combined impact was a 4 cent year-over-year headwind to EPS.

Consolidated results

Total consolidated operating revenues in first-quarter 2019 were $32.1 billion, up 1.1 percent from first-quarter 2018, primarily driven by strong wireless service revenue growth.

Cash flow from operations totaled $7.1 billion in first-quarter 2019, an increase of approximately $400 million year over year. This increase was driven by the continued momentum in Verizon's operating businesses and lower discretionary employee benefits contributions, partially offset by the first -- and largest -- of three payments related to the Voluntary Separation Program.

First-quarter 2019 capital expenditures totaled $4.3 billion. Verizon's capital expenditures continue to support the launch and continued build-out of its 5G Ultra Wideband network, the growth in data and video traffic on the company's 4G LTE network, the deployment of significant fiber in markets nationwide and the upgrade to Verizon's Intelligent Edge Network.

In 2018, Verizon announced a goal to achieve $10 billion in cumulative cash savings by 2021. This initiative has yielded approximately $3.0 billion of cumulative cash savings since this program began. By the end of first-quarter 2019, Verizon completed the first two phases of its Voluntary Separation Program and realized approximately $180 million of expense savings. These savings are expected to contribute to the company's cumulative cash savings goal.

For first-quarter 2019, Verizon Media revenues were $1.8 billion, down 7.2 percent year over year. Declines in desktop advertising continue to more than offset growth in mobile and native advertising.

Net income was $5.2 billion in first-quarter 2019. EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled approximately $12.2 billion. Consolidated operating income margin was 24.0 percent. Consolidated EBITDA margin (non-GAAP) was 38.1 percent in first-quarter 2019, compared with 36.4 percent in first-quarter 2018. Adjusted EBITDA margin (non-GAAP) in first-quarter 2019 was 37.2 percent.

Wireless results

  • Verizon reported 61,000 retail postpaid net additions in first-quarter 2019, consisting of 44,000 phone net losses and tablet net losses of 156,000, offset by 261,000 other connected device net additions, primarily wearables. Postpaid smartphone net additions were 174,000.
  • Total revenues were $22.7 billion, an increase of 3.7 percent year over year, primarily driven by continued strong service revenue performance.
  • Service revenues increased 4.4 percent in first-quarter 2019, driven by customer step-ups to higher-priced plans, contributions from strong retail postpaid net additions in fourth-quarter 2018 and an increase in connections per account.
  • Total retail postpaid churn was 1.12 percent in first-quarter 2019, and retail postpaid phone churn was 0.84 percent.
  • Segment operating income was $8.5 billion, an increase of 5.2 percent year over year. Segment EBITDA (non-GAAP) totaled $10.8 billion in first-quarter 2019, an increase of 2.7 percent year over year. Segment EBITDA margin (non-GAAP) was 47.4 percent, including approximately 85 basis points in headwinds primarily from the deferral of commission expense and the new lease accounting standard.

Wireline results

  • Total wireline revenues decreased 3.9 percent year over year in first-quarter 2019 to $7.3 billion, as growth in high-quality fiber products was offset by pricing pressures on legacy products and technology shifts.
  • Total Fios revenues grew 3.6 percent year over year to $3.1 billion. In first-quarter 2019, Verizon added a net of 52,000 Fios Internet connections and lost a net of 53,000 Fios Video connections, continuing to reflect the shift from traditional linear video to over-the-top offerings.
  • Wireline operating loss was $88 million in first-quarter 2019, and segment operating loss margin was 1.2 percent. Segment EBITDA (non-GAAP) was $1.5 billion in first-quarter 2019. Segment EBITDA margin (non-GAAP) was 20.3 percent in first-quarter 2019, compared with 21.2 percent in first-quarter 2018.

Outlook and guidance

Based on the strength of the operational trends in the underlying business, Verizon is raising earnings guidance for full-year 2019:

  • The company expects low single-digit percentage growth in adjusted EPS, excluding the impact of the new lease accounting standard. This is an increase from prior guidance for 2019 adjusted EPS to be similar to 2018, excluding the impact of the new lease accounting standard. 

Verizon also expects the following:

  • Low single-digit percentage growth in full-year consolidated revenues on a GAAP reported basis.
  • The effective tax rate for full-year 2019 to be in the range of 24 percent to 26 percent.
  • Cash taxes to be $2 billion to $3 billion higher than in 2018 due to benefits that were realized in 2018 that are not expected to repeat in 2019. 
  • Capital spending for 2019 to be in the range of $17 billion to $18 billion, including the expanded commercial launch of 5G.

NOTE: See the accompanying schedules and for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.

Forward-looking statements

In this communication we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words “anticipates,” “believes,” “estimates,” “expects,” “hopes” or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The following important factors, along with those discussed in our filings with the Securities and Exchange Commission (the “SEC”), could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: adverse conditions in the U.S. and international economies; the effects of competition in the markets in which we operate; material changes in technology or technology substitution; disruption of our key suppliers’ provisioning of products or services; changes in the regulatory environment in which we operate, including any increase in restrictions on our ability to operate our networks; breaches of network or information technology security, natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial impact not covered by insurance; our high level of indebtedness; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations or adverse conditions in the credit markets affecting the cost, including interest rates, and/or availability of further financing; material adverse changes in labor matters, including labor negotiations, and any resulting financial and/or operational impact; significant increases in benefit plan costs or lower investment returns on plan assets; changes in tax laws or treaties, or in their interpretation; changes in accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; the inability to implement our business strategies; and the inability to realize the expected benefits of strategic transactions.

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