Verizon (NYSE:VZ) has stayed flat or on the positive side of the line Tuesday despite Q4 earnings that were mostly in line, but where its guidance fell short of Street forecasts.
That came despite some positive signs as the company returned to growth in its consumer postpaid wireless business. Retail postpaid net adds were 1.43M (its best single quarter in seven years), and postpaid phone net adds came to 217,000.
For 2023, though, the company sees earnings per share of $4.55-$4.85, and earnings before interest, taxes, depreciation and amortization of $47B-$48.5B. It also expects capital spending in the range of $18.25B-$19.25B, including a remaining $1.75B of $10B in incremental C-band capital spending.
Tuesday afternoon, Verizon stock (VZ) was up 0.7% while the rest of the market was flat at best.
The guidance was “weak,” Oppenheimer’s Timothy Horan said, noting EBITDA looks flat with 2022 but earnings per share dropping 9% on higher expenses, including interest and depreciation.
New Street Research noted positive wireless ads but pronounced them “a little disappointing,” adding that EBITDA outlook also fell short of expectations.
Verizon’s 2023 guidance validates a below-consensus forecast from Evercore ISI, analyst Vijay Jayant said in reaction. “We had thought Street estimates for 2023 were high, on EPS in particular … and Verizon’s guidance proves that out,” he said, noting Evercore’s below-Street estimate for $4.82 is at the high end of Verizon’s own guidance for $4.55-$4.85.
Verizon is guiding to wireless service revenue growth of 2.5%-4.5%, but Jayant noted that includes about a 190-basis point benefit from reallocating other revenue to wireless service – and netting that out, the forecast (for 0.6%-2.6%) is below his expectations for 3.3%.
For more commentary, check out Seeking Alpha’s transcript of Verizon’s Q4 earnings call.