Verizon says earnings show ‘strategy working’
April 21, 2021
Verizon Communications closed 2020 with Q4 results buoyed by increased cash flow, wireless service revenue growth, and the launch of 5G nationwide.
“Verizon finished the fourth quarter with strong financial performance,” said Verizon Chairman and CEO Hans Vestberg. “2020 was marked by transformational change, including the launch of our 5G nationwide network. We witnessed a mass shift toward virtual collaboration, touchless retail and delivery, remote work, distance learning, and telemedicine. We continued to execute our multi-use network strategy; we were recognized by RootMetrics as the best overall wireless provider, undefeated in all categories; and we continue to be the partner of choice for the world’s most innovative brands. Today, we are excited to lead technological advances beyond mobile devices, and create new opportunities for growth across multiple industries.”
Total consolidated operating revenues in fourth-quarter 2020 were $34.7 billion, down 0.2 per cent from fourth-quarter 2019. Total wireless service revenue growth and strong results in Verizon Media were offset by lower wireless equipment revenue and ongoing declines in legacy wireline products. Full-year 2020 consolidated operating revenues were $128.3 billion, down 2.7 per cent year over year.
Cash flow from operations totalled $41.8 billion in 2020, a 16.8 percent increase year over year. This growth was a result of the continued performance and strength of the business, lower tax payments due to a one-time cash tax benefit received earlier in the year, and reductions in working capital primarily due to lower wireless volumes.
Full-year 2020 capital expenditures were $18.2 billion. Capital expenditures continue to support the growth in traffic on the company’s 4G LTE network and the continued build-out of the company’s 5G Ultra Wideband and nationwide networks.
In 2018, Verizon announced a goal to achieve $10 billion in cumulative cash savings by the end of 2021. This initiative has yielded $9.5 billion of cumulative cash savings since the program began and is on track to achieve its target by the end of 2021.
The company ended 2020 with free cash flow (non-GAAP) of $23.6 billion, a 32.4 per cent increase year over year.
Verizon’s unsecured debt balance increased year over year by $19.3 billion to $118.5 billion in 2020, and the company’s net unsecured debt (non-GAAP) decreased by $239 million year over year to $96.3 billion. Verizon’s net income in fourth-quarter 2020 was $4.7 billion, and its adjusted EBITDA (non-GAAP) was $11.7 billion. Verizon’s net unsecured debt to adjusted EBITDA ratio (non-GAAP) was 2.0 times versus its targeted range of 1.75 to 2 times. The company remains committed to its capital allocation model.