Verizon’s Wireless Revenue Grew Moderately in 2Q15
Verizon's 2Q15 Earnings Beat Expectations, Wireless Margins Expand
Verizon’s wireless revenue
Earlier in this series, we learned that Verizon’s (VZ) revenue growth was dampened by the wireline segment in 2Q15. Verizon’s wireless revenue grew moderately by ~5.30% YoY (year-over-year) to reach ~$22.6 billion. We also mentioned that Verizon is the market leader in the US wireless space. It has the largest postpaid base. Now, we’ll look at the two core components of Verizon’s wireless revenue—service and equipment revenue. Equipment revenue is the smaller part of the two. It drove the segment’s growth during 2Q15.
Verizon’s wireless service revenue in 2Q15
The wireless segment’s service revenue fell by ~2.20% YoY to reach ~$17.7 billion in 2Q15. These are stable revenue streams for wireless telecom companies like Verizon, AT&T (T), Sprint (S), and T-Mobile (TMUS).
Verizon’s wireless service revenue also fell in 1Q15. The downward trend in Verizon’s wireless service revenue has been driven by postpaid subscribers’ falling unit contribution.
Verizon’s 2Q15 wireless equipment revenue
The robust YoY growth in equipment revenue continued even in 2Q15. The wireless equipment revenue grew by ~61.80% to ~$3.9 billion. Verizon’s wireless equipment revenue also rose by a significant ~80.40% YoY in 1Q15. The growth in the installment billings of Verizon’s Edge plan is positively contributing to the equipment revenue.
In the next part of this series, we’ll look at Verizon’s Edge plan.
Instead of taking direct exposure to Verizon’s stock, you can get diversified exposure to the company by investing in the SPDR Dow Jones Industrial Average ETF (DIA) or the SPDR S&P 500 ETF (SPY). Verizon accounted for ~1.80% of DIA as of July 31, 2015. Verizon accounted for ~1% of SPY’s holdings as of the same date.
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