Verizon Communications (VZ) - Get Verizon Communications Inc. Report on Tuesday posted stronger-than-expected fourth-quarter earnings and gave an optimistic forecast for 2022 earnings and sales amid what it sees as ongoing demand for its wireless services, particularly 5G.
Verizon said adjusted earnings for the three months ending in December were $1.31 a share, up from $1.21 a share in the year-ago quarter. Analysts polled by Factset had been expecting earnings of $1.28 a share.
Revenue came in at $34.1 billion, down 1.8% from last year but above consensus estimates of $33.89 billion.
Total Verizon consumer revenue was $25.7 billion in the fourth quarter, an increase of 7.4% year over year, driven in part by a boost in wireless subscribers.
Consumer wireless service revenue rang in at $14.6 billion, up 7.7%, "...reflecting ongoing step-ups to unlimited and premium unlimited plans, and the contribution from TracFone," Verizon said.
Consumer wireless retail postpaid churn was 0.94% in fourth-quarter 2021, and wireless retail postpaid phone churn was 0.77%, the company said.
'A Transformational Year'
"2021 was a transformational year for Verizon that will serve as a catalyst for us," CEO Hans Vestberg said in a statement. "We delivered on all of our goals in 2021 and made great progress on our five paths of growth, finishing the year with strong operating and financial momentum."
Verizon ended 2021 with free cash flow of $19.3 billion, a decrease from $23.6 billion at year-end 2020, the company said. Verizon's unsecured debt as of the end of fourth quarter rose by $18.2 billion year over year to $136.7 billion, but improved by $4.9 billion sequentially from the end of the third quarter.
For 2022, Verizon said it expected adjusted earnings before income, taxes, depreciation and amortization (EBITDA) in the range of 2-3% and adjusted per-share earnings of between $5.40 and $5.55.
On the spending side, the company sees capital spending excluding C-band costs in the range of $16.5 billion to $17.5 billion, a decrease from $18.2 billion in 2021. Additional expenditures related to the deployment of the company's C-Band 5G network are expected to be in the range of $5 billion to $6 billion.
Laser-Focused on 5G
"As we move into 2022, we have the necessary assets to realize our strategy that we laid out in 2019. We are laser focused on executing our 5G strategy and providing value to our customers, shareholders, employees, and society, as 2022 will be the most exciting year yet for Verizon," Vestburg said.
U.S. air travelers have faced turbulence this month as carriers around the world canceled flights in and out of the country following the initial rollout of 5G networks by Verizon and AT&T (T) - Get AT&T Inc. Report.
The companies launched 5G, or fifth-generation, service earlier this month but said they will delay turning on certain 5G cell towers within a two-mile radius of runways designated by federal officials as a compromise to airlines, who have expressed concern that the signals could interfere with transmission signals.
Verizon shares were down 0.3% at $52.80 in premarket trading. The stock is up just under 1% so far this year.