Telecom heavyweight Verizon Communications
What analysts say:
- Buy, sell, or waffle? A total of 29 analysts follow Verizon, and this group is almost evenly split along the buy/hold line -- 13 say buy while 15 say hold shares (a lone analyst says sell). In the Motley Fool CAPS community, 1,538 investors rating the company give it a collective four-star rating (out of five possible).
- Revenues. On average, analysts see revenue of $24 billion this quarter, up 6% from last year.
- Earnings. Analysts project earnings of $0.62 per share, essentially flat when compared to last year.
What management says:
Verizon's management team has been glowing lately, trumpeting broad success against tough competitors -- such as AT&T
What management does:
Even though one quarter does not a trend make, improvements in the operating structure of Verizon appear to be taking hold. Verizon saw a significant uptick in operating margins last quarter, and the drop in net income is explained by a bigger tax burden in the quarter.
6/06 |
9/06 |
12/06 |
3/07 |
6/07 |
9/07 |
|
---|---|---|---|---|---|---|
Gross |
61.8% |
60.5% |
60.3% |
60.5% |
60.5% |
60.4% |
Operating |
16.3% |
15.6% |
16.1% |
16.5% |
16.8% |
17.2% |
Net |
8.8% |
8.4% |
7% |
6.8% |
6.7% |
5.9% |
One Fool says:
Verizon's wireless business -- which it operates with partner Vodafone
The only problem with Verizon is its high valuation. Although a current dividend yield of 4.7% is tempting, Verizon's current P/E of 20 makes it a rich alternative to its peers. I expect Verizon to again report exceptional operational performance this quarter, but I see little upside in shares priced with that expectation in mind.
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