
Will Verizon (VZ) Stock Fall on Investigation By New York Attorney General?
NEW YORK (TheStreet) -- Verizon Communications (VZ) - Get Report is being investigated by New York State Attorney General Eric Schneiderman for possibly not providing the Internet speed that was promised to customers, Reuters reports.
Time Warner Cable (TWC) and Cablevision Systems Corp. (CVC) are also being investigating.
"New Yorkers deserve the Internet speeds they pay for," Schneiderman said in a statement, Reuters added. "But, it turns out, many of us may be paying for one thing, and getting another."
Verizon executives received letters asking for copies of disclosures and Internet speed tests results, Reuters noted.
"Verizon is confident in the robust and reliable Internet speeds it delivers to subscribers," a company spokesman said, according to Reuters.
The investigation is focused on contracts that Internet providers make with other companies to exchange data and customer who pay a premium for faster speeds.
Verizon stock is up by 0.54% to $46.42 in afternoon trading on Monday.
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 multiple 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, increase in net income, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel its 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 0.3%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Diversified Telecommunication Services industry average. The net income increased by 9.3% when compared to the same quarter one year prior, going from $3,695.00 million to $4,038.00 million.
- Net operating cash flow has increased to $9,520.00 million or 13.97% when compared to the same quarter last year. In addition, VERIZON COMMUNICATIONS INC has also modestly surpassed the industry average cash flow growth rate of 4.52%.
- VERIZON COMMUNICATIONS INC has improved earnings per share by 11.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VERIZON COMMUNICATIONS INC reported lower earnings of $2.51 versus $4.00 in the prior year. This year, the market expects an improvement in earnings ($3.97 versus $2.51).
- The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 59.87%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VZ's net profit margin of 12.17% compares favorably to the industry average.
- You can view the full analysis from the report here: VZ








