Verizon Q4 Earnings Preview: Can 5G Growth Reverse Revenue Misses?

As Verizon Communications Inc. (NYSE: VZ) prepares to release its fourth-quarter financial results on Friday, January 24, investors are eager to see if the company can show significant 5G growth and reverse its streak of revenue misses. Verizon has missed analyst estimates for revenue in three straight quarters and five of the last 10 quarters. However, the company has beaten analyst estimates for earnings per share in five of the last 10 quarters and met expectations in four of the last 10 quarters.

Analysts expect Verizon to report fourth-quarter revenue of $35.32 billion, up from last year's fourth-quarter total of $35.13 billion, and earnings per share of $1.10, up from $1.08 in last year's fourth quarter. However, the company's recent cyberattack linked to China and the end of net neutrality could impact these earnings estimates.

Verizon's 5G growth is a critical factor in its ability to reverse its revenue misses. The company has been expanding its 5G network coverage, which currently reaches over 230 million people. Verizon has also been deploying C-band spectrum, which can support faster and more reliable 5G speeds. As of Q3 2023, 5G traffic using C-band spectrum made up more than 38% of the total data on Verizon's network, up from over 14% one year ago.

Verizon's 5G Fixed Wireless Access (FWA) service is another key driver of revenue growth. The service provides in-home broadband services to customers and has seen steady growth. As of Q3 2023, over 2.5 million consumer and business customers are using Verizon's FWA service. Verizon expects to cover up to 50 million households with its fixed wireless Internet service by 2024, up from its earlier promise of reaching 30 million households.

To reverse its streak of revenue misses, Verizon can focus on several strategic initiatives:

1. Expanding 5G Network Coverage: Verizon can continue to expand its 5G network coverage, which can attract more customers and increase data usage. The company can also focus on deploying C-band spectrum, which can support faster and more reliable 5G speeds.
2. Growing 5G FWA Service: Verizon can focus on growing its 5G FWA service, which can attract customers who prefer a wireless alternative to traditional wired broadband. The company can also consider offering competitive pricing for its fixed wireless Internet service.
3. Improving Network Performance: Verizon can continue to upgrade its network architecture, introduce advanced technologies like virtualization, automation, and orchestration, and improve core functions to provide a better customer experience. This can help attract more customers and increase data usage.
4. Expanding Private Networking Solutions: Verizon can expand its private networking solutions for business customers, such as the NFL's Coach-to-Coach network, to attract more enterprise clients and increase revenue.
5. Lowering Capital Intensity: Verizon can announce plans to lower its capital intensity to below 12% in 2024, which can help improve its financial performance and profitability.




In conclusion, Verizon's 5G growth is crucial to reversing its streak of revenue misses. The company can focus on expanding its 5G network coverage, growing its 5G FWA service, improving network performance, expanding private networking solutions, and lowering capital intensity to achieve this goal. Investors should pay close attention to these metrics and strategic initiatives when Verizon reports its fourth-quarter financial results on Friday, January 24.