Verizon beats in Q1, brings in the cash

Posted Apr 27th 2009 5:50PM by Steven Mallas
Filed under: Earnings Reports, Apple Inc (AAPL), AT and T (T), Verizon Communications (VZ)

Verizon Communications, Inc. (NYSE: VZ) reported Q1 earnings on Monday, and they didn't disappoint. The telecommunication entity said it earned $0.63 per share on an adjusted basis. Okay, the growth wasn't so great. The company earned an adjusted $0.61 per share in the year-ago period. But you know the game: it's all about expectations. So, on that count, Verizon was ahead by four pennies, according to this database.

But the Verizon story isn't just about earnings. It's also about cash flow. Net cash from operations increased 19% to $6.4 billion. Free cash flow more than doubled to $2.7 billion. Verizon is a well-known dividend-paying stock, so shareholders definitely want to see good cash flows.

The purchase of Alltel Wireless helped to drive results in the quarter. Indeed, as Brian White mentioned back in January, the transaction really put Verizon in a strong position. The company is now the biggest wireless business in the U.S. Sorry, AT&T Inc. (NYSE: T)!

Of course, the most significant aspect of the Verizon story from a short-term perspective these days is the whole Apple, Inc. (NASDAQ: AAPL) angle. Will the iPhone come over to Verizon Wireless? There's been a lot of chatter about this. We'll have to stay tuned, but it seems like something could happen in this regard. If it does, it would certainly be a positive development for Verizon and Apple shareholders alike, as this item suggests.

Looking through the earnings release, it seems to me that Verizon is doing pretty well with its various product offerings. FiOS continues to grow, as well as services dedicated to business. Verizon is trading right now at a very attractive dividend yield. I'm not sure if it's going to be rising anytime soon, but for conservative investors who like payouts, the stock might be an interesting candidate for consideration. Joseph Lazzaro, in fact, recently discussed Verizon and its potential as an investment idea.

Disclosure: I don't own any company mentioned; positions can change without notice.

Tags: AAPL, alltel wireless, AlltelWireless, Apple, ATT, brian white, BrianWhite, dividend inves, dividend s, DividendInves, dividends, FiOS, iPhone, joseph lazzaro, JosephLazzaro, t, Verizon, VZ