Update (4:35 p.m.): Updated with Thursday market close information and Netflix story.
NEW YORK (TheStreet) -- Verizon (VZ - Get Report) rose Thursday after CEO Lowell McAdam told CNBC the telecommunications giant added more than 1.4 million net postpaid subscribers in the second quarter.
This marks an increase from 539,000 in the first quarter of this year and 941,000 in the second quarter last year. McAdam also said Verizon had record tablet growth and strong smartphone growth in the second quarter.
The company will report its second-quarter results on Tuesday, July 22.Must Read: Warren Buffett's 25 Favorite Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Verizon is also working "aggressively" with Netflix (NFLX - Get Report) to build new, direct network connections to improve the quality of the latter's streaming video, according to a blog post on Verizon's website. The company said it reviewed its data traffic and found "no congestion anywhere within the Verizon network." But Verizon did find congestion "at the interconnection link to the edge of our network (the border router) used by the transit providers chosen by Netflix to deliver video traffic to Verizon's network." The stock closed up 1.51% to $49.64. More than 18.3 million shares changed hands, which beat the average volume of 16,144,300. Separately, TheStreet Ratings team rates VERIZON COMMUNICATIONS INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: "We rate VERIZON COMMUNICATIONS INC (VZ) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, compelling growth in net income and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VZ's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 4.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, VERIZON COMMUNICATIONS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 63.69%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.80% is above that of the industry average.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 102.2% when compared to the same quarter one year prior, rising from $1,952.00 million to $3,947.00 million.
- VERIZON COMMUNICATIONS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VERIZON COMMUNICATIONS INC increased its bottom line by earning $4.00 versus $0.31 in the prior year. For the next year, the market is expecting a contraction of 12.6% in earnings ($3.50 versus $4.00).
- You can view the full analysis from the report here: VZ Ratings Report
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