Winners And Losers Of Q3: Verizon (NYSE:VZ) Vs The Rest Of The Wireless, Cable and Satellite Stocks
As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the wireless, cable and satellite industry, including Verizon (NYSE:VZ) and its peers.
The massive physical footprints of cell phone towers, fiber in the ground, or satellites in space make it challenging for companies in this industry to adjust to shifting consumer habits. Over the last decade-plus, consumers have ‘cut the cord’ to their landlines and traditional cable subscriptions in favor of wireless communications and streaming video. These trends do mean that more households need cell phone plans and high-speed internet. Companies that successfully serve customers can enjoy high retention rates and pricing power since the options for mobile and internet connectivity in any geography are usually limited.
The 9 wireless, cable and satellite stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 9.1% since the latest earnings results.
Verizon (NYSE:VZ)
Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE:VZ) is a telecom giant providing a range of communications and internet services.
Verizon reported revenues of $33.33 billion, flat year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ adjusted operating income estimates.
Verizon Total Revenue
Unsurprisingly, the stock is down 10.4% since reporting and currently trades at $39.16.
Operating as Spectrum, Charter (NASDAQ:CHTR) is a leading telecommunications company offering cable television, high-speed internet, and voice services across the United States.
Charter reported revenues of $13.8 billion, up 1.6% year on year, outperforming analysts’ expectations by 1%. The business had a satisfactory quarter with a decent beat of analysts’ adjusted operating income estimates.
Charter Total Revenue
The market seems happy with the results as the stock is up 7% since reporting. It currently trades at $350.56.
Tracing its origins back to CenturyLink’s acquisition of Level 3 Communications, Lumen Technologies (NYSE:LUMN) provides telecom services, including voice, high-speed internet, and cloud solutions for residential and business customers.
Lumen Technologies reported revenues of $3.22 billion, down 11.5% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.
Lumen Technologies delivered the slowest revenue growth in the group. As expected, the stock is down 26.1% since the results and currently trades at $5.63.
Initially started in Denver as a cable television provider, WideOpenWest (NYSE:WOW) provides high-speed internet, cable, and telephone services to the Midwest and Southeast regions of the U.S.
WideOpenWest reported revenues of $158 million, down 8.7% year on year. This print met analysts’ expectations. Taking a step back, it was a slower quarter as it produced a significant miss of analysts’ adjusted operating income and EPS estimates.
WideOpenWest pulled off the highest full-year guidance raise among its peers. The stock is down 16.4% since reporting and currently trades at $4.44.
Founded in 1986, Cable One (NYSE:CABO) provides high-speed internet, cable television, and telephone services, primarily in smaller markets across the United States.
Cable One reported revenues of $393.6 million, down 6.4% year on year. This number beat analysts’ expectations by 0.6%. Zooming out, it was a slower quarter as it recorded a significant miss of analysts’ EPS estimates.
The stock is down 17.2% since reporting and currently trades at $320.14.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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