While the carrier’s consumer business has struggled in recent quarters, Verizon’s business unit, led by SMB growth, helped the company close out fiscal 2022 on a strong note.
Verizon is relying on its core network capabilities and growing strength in its business and SMB segments to focus on its wireless strategy and growing subscriber numbers.
In the last quarter of the telecom titan’s fiscal 2022 (ended Dec. 31), Verizon posted a profit in business activity after struggling to win over customers — that is, consumers and enterprises — due to macroeconomic pressures throughout the year.
Verizon CEO Hans Vestberg (pictured) said during the carrier’s earnings call, “Network quality is the foundation of our strategy and growth… Although we have a lot of work to do, I’m encouraged by the improvements made and look forward to building on the momentum in 2023.” Call on Tuesday morning.
The service provider has been taking steps to run its operations efficiently. In October, it announced the creation of Verizon Global Services (VGS), which will allow the carrier to free up $2 billion to $3 billion in capital for its shared services groups, so Verizon can invest more in its core network and telecom. Services. Later in December, Vestberg took direct control of Verizon’s consumer division after less than a year on the job as he tried to return the division to growth due to the loss of consumer subscribers from AT&T and T-Mobile.
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Verizon posted a total broadband network of 416,000 customers in Q4 of fiscal 2022, the best overall broadband performance in more than a decade, which the carrier said reflects strong demand for Fios and fixed wireless products.
Vestberg said Verizon is looking to grow its fixed wireless access business. The company It hopes to have up to 5 million fixed wireless access customers by 2025, especially as more businesses consider personal wireless and 5G connectivity options and edge computing.
“We are making the right investments to ensure that services like this will make a meaningful contribution to future growth in the coming years, which will set us apart in the industry,” Vestberg said.
Verizon Business reported 455,000 wireless retail postpaid net additions in the third quarter of 2022, including 176,000 phone net additions. The results mark the sixth consecutive quarter that the business has reported net additions of more than 150,000 postpaid phones.
Business wireless revenue was $3.3 billion, up 4.7 percent year-over-year. Full-year 2022 business wireless revenue was $12.8 billion, up 3.9 percent from 2021.
Total Verizon Business operating income, which includes the company’s Global Enterprise Solutions, SMB, Public Sector and Wholesale businesses, rose 1.2 percent on revenue of $7.90 billion in the fourth quarter.
Global Enterprise Solutions, which has felt the financial fallout during the pandemic, continued to see revenue decline, with revenue falling 4.2 percent to $2.43 billion in the fourth quarter of 2022, compared to $2.53 billion a year earlier.
SMB revenue, meanwhile, continued to grow, rising 5.5 percent in the quarter to $3.28 billion from $3.11 billion last year. Public sector revenues rose slightly by 0.9 percent to $1.53 billion, compared to $1.52 billion in the quarter. In the fourth quarter of 2022, wholesale revenue rose 1.7 percent to $662 million from $651 million a year ago.
Verizon reported operating income of $35.25 billion for the fourth quarter, a 3.5 percent increase from $34.07 billion in the fourth quarter of 2021. The carrier’s net income rose 41.4 percent to $60.70 billion in the quarter, compared with $4.73 billion in the same period last year. Verizon reported diluted earnings per share of $1.56 in Q4 2022, up 40.5% from $1.11 in Q4 2021.
The Baking Ridge, NJ-based service provider bested Wall Street’s $35.09 billion in revenue in the last quarter of the year. However, Verizon’s estimate of adjusted earnings of $4.55 to $4.85 a share in 2023 fell short of Wall Street’s expectation of $4.96, which weighed on the stock price on Tuesday.
For all of 2022, Verizon projected total operating income of $136.84 billion, up 2.4 percent from $133.61 billion in 2021. The carrier’s net revenue for the year was $21.75 billion, down 3.8 percent from $22.62 billion in 2021. Paid-in revenue was $5. In the year In 2022, it was down 4.9 percent from $5.32 a year earlier.
Verizon shares fell 1.4 percent on Tuesday after the release of fiscal Q4 2022 earnings and 2023 guidance.