Tag Archives: VZ

$VZ,Verizon Communications Inc.

Verizon unlimited hurting its network performance?

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CNBC’s Mike Santoli talks about Verizon’s unlimited plans and whether they’re hurting the company’s network performance.






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Why Is Cost-Cutting Significant for Sprint?

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In fiscal 2016, Sprint realized $2.1 billion worth of cost reductions, of which ~$500 million were realized in fiscal 4Q16, the quarter that ended in March 2017.






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Verizon Wireless expands into larger call center, plans 100-300 new jobs in Charlotte

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Verizon Wireless (NYSE:VZ) has signed a lease for expanded call-center space in a former big-box retail store in east Charlotte. The Basking Ridge, N.J.-based telecommunications giant is leasing nearly …






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Telecom Stock Roundup: Nokia and Apple Drop Patent Lawsuit, Verizon Conducts 5G Trials

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The telecom industry saw strong performances by most of the key stocks last week. A few developments even made to the headlines.






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A Look at Sprint’s Capex Plans for Fiscal 2017

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Investor Updates: What’s the Latest News from Sprint? PART 1 OF 11

Sprint’s capex

Let’s take a closer look at Sprint’s (S) future expected capital expenditure (or capex). Sprint continues to invest in capex to improve its network. Sprint believes that it’s uniquely positioned and will have a capital intensity advantage compared to its peers in the long term, given its spectrum depth.

In Sprint’s fiscal 4Q16, the quarter that ended in March 2017, it spent just over $0.9 billion in cash capex, a fall compared to $1.2 billion in fiscal 3Q16 and $1.3 billion in fiscal 4Q15. The year-over-year fall was driven by lower network spending, as the company has focused on lowering its capex through carrier aggregation and small cell deployments. Meanwhile, the sequential fall was mostly driven by lower leased device capex.

A Look at Sprint’s Capex Plans for Fiscal 2017

Expected capex investments in 2017

Sprint expects its cash capex to be in the range of $3.5 billion–$4.0 billion in fiscal 2017, excluding the impact of leased devices sold through indirect channels. Sprint’s management expects its cash capex to remain at these levels for the next three years.

In comparison, competitor Verizon (VZ) expects its capex to come in at $16.8 billion–$17.5 billion in 2017, whereas AT&T (T) is expected to spend ~$22 billion on capex in 2017. Meanwhile, T-Mobile (TMUS) expects its cash capex for 2017 to be in the range of $4.8 billion–$5.1 billion, excluding capitalized interest.

T-Mobile and Sprint’s lower spending on capex comes from their lower operating cash flows and the rising debt on their balance sheets.






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What Could Verizon and AT&T Do with New Regulatory Freedom?

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Key Updates: What’s Happening in the US Telecom Industry? PART 6 OF 10

FCC drops price restrictions

The FCC (Federal Communications Commission) voted in April to undo the rule that imposed price limits on the business data services (or BDS) market. These services include broadband Internet access services that support enterprise operations such as connecting bank branches and ATM networks or credit card readers in a retail store. AT&T (T), Verizon (VZ), and CenturyLink (CTL) are major providers in the BDS market.

What Could Verizon and AT&T Do with New Regulatory Freedom?

Motivation behind the FCC move

The removal of the BDS price caps means that AT&T and Verizon can now charge more for their services. The FCC reasoned that this move would encourage BDS providers to invest in upgrading their systems so that customers can enjoy even better services. The regulator also envisions that doing away with the price caps could cause competitors such as Sprint (S) to build their own facilities. If they do that, the market will be more competitive, leading to better services and prices for customers.

Comcast (CMCSA) also thinks the FCC made a wise move by eliminating what its senior vice president, David Cohen, described as investment-killing regulations.

Potentially more cash for reinvestment in growth

Verizon and AT&T could take advantage of the new regulatory freedom to generate more cash to invest in their network upgrade programs or support their revenue diversification efforts. The carriers have been eyeing the media and advertising market for growth opportunities beyond their core operations.

For Sprint and T-Mobile (TMUS), a wealthier AT&T or Verizon would be tough to challenge.






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What Is Sprint’s Scale in the Telecom Space?

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Will Sprint’s Rebound Continue? PART 9 OF 10

Sprint’s scale

In this article, we’ll look at some value-centric measures for Sprint (S) in comparison to the other major companies in the US wireless space. We’ll start with the size of the top four US wireless carriers: Verizon (VZ), AT&T (T), T-Mobile (TMUS), and Sprint.

What Is Sprint’s Scale in the Telecom Space?

As of May 17, 2017, AT&T was the largest US telecom player, Verizon was the second largest, while T-Mobile was the third-largest player by market capitalization. Sprint’s market capitalization remained lower than T-Mobile’s.

Sprint’s valuation multiples

EV-based (enterprise value) multiples help investors understand the value of a company via its sources of capital from shareholders’ point of view. EV multiples are forward multiples based on expected values after a year.

As of May 17, 2017, Sprint’s forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) metric was ~5.35x, which was lower than T-Mobile’s at ~6.70x. Meanwhile, the integrated US telecom giants Verizon and AT&T had similar EV-to-EBITDA metrics of ~6.51x and ~6.55x, respectively.

In the next article of this series, we’ll look at analysts’ recommendations for Sprint stock.






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Stock Market News for May 25, 2017

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Benchmarks closed in the green on Wednesday following the release of minutes from the Federal Reserve’s meeting held on 2-3 May. The minutes assured investors that the central bank has opted for a slow and gradual process of unwinding of its massive balance sheet. Moreover, Fed officials also signaled that the central bank may raise its key interest rates in its next meeting on June 13-14.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

DJI) gained 0.4% to close at 21,012.42. The S&P 500 rose 0.3% to a record close at 2,404.39. Both the Dow and the S&P 500 posted gains for a fifth consecutive session on Wednesday, marking their longest winning streak since February. The tech-laden Nasdaq Composite Index advanced 0.4% to close at 6,163.02. A total of around 6.1 billion shares were traded on Wednesday, lower than the last 20-session average of 6.8 billion shares. The fear-gauge CBOE Volatility Index (VIX) traded near 9.89. Advancers outnumbered declining stocks on the NYSE by a 1.30 to 1 ratio.   " data-reactid="13">The Dow Jones Industrial Average (DJI) gained 0.4% to close at 21,012.42. The S&P 500 rose 0.3% to a record close at 2,404.39. Both the Dow and the S&P 500 posted gains for a fifth consecutive session on Wednesday, marking their longest winning streak since February. The tech-laden Nasdaq Composite Index advanced 0.4% to close at 6,163.02. A total of around 6.1 billion shares were traded on Wednesday, lower than the last 20-session average of 6.8 billion shares. The fear-gauge CBOE Volatility Index (VIX) traded near 9.89. Advancers outnumbered declining stocks on the NYSE by a 1.30 to 1 ratio.   

Unwinding of Fed’s Balance Sheet

As per minutes released from the Federal Reserve’s meeting held on 2-3 May, the central bank officials agreed to trim down its $4.5 trillion balance sheet. The Fed holds a massive portfolio of government debt, generated by purchasing treasury and mortgage-backed securities in the years after the financial crisis. According to minutes released, the central bank hinted that it may start unwinding the balance sheet later this year.

So far, the central bank has been reinvesting the proceeds it receives from maturing securities in more bonds. The central bank called for gradual reduction in the amount of bonds it would be purchasing each month. Fed is expected to set cap limits on the amount of securities it will agree to roll off each month without reinvesting. According to minutes, caps would be set at lower levels in an initial stage and then would be raised every three months.

Interest Rates Hike

In its minutes, the Fed indicated that it may raise interest rates in its next meeting in June. The minutes also revealed that most of the Fed policymakers agreed that it would “soon” be time to hike interest rates.

As per CME Group’s FedWatch tool, market expectations for a June rate hike are now at 83.1%. Strong rate hike prospects and Fed’s proposal to unwind its balance sheet boosted investor sentiment.

XLB) advanced 0.7%, emerging as the best performing sector of S&P 500. Some of the key holdings of the materials sector in the S&P 500 including Praxair Inc PX and Ecolab Inc ECL gained 1.8% and 1% respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here." data-reactid="20">The broader Materials Select Sector SPDR (XLB) advanced 0.7%, emerging as the best performing sector of S&P 500. Some of the key holdings of the materials sector in the S&P 500 including Praxair Inc PX and Ecolab Inc ECL gained 1.8% and 1% respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

As per the National Association of Realtors, existing-home sales declined 2.3% in April to a seasonally adjusted annual rate of 5.57 million, lagging the consensus estimate of 5.65 million. The sales figure recorded an increase of 1.6% year over year.

Stocks that made Headlines

HP Inc. Tops Q2 Earnings & Revenues, Raises Guidance

HP Inc. HPQ released its second-quarter fiscal 2017 earnings yesterday, after splitting from Hewlett-Packard Company. (Read More)

T-Mobile US’ Latest Offer Poised to Threat Verizon

U.S. national wireless carrier T-Mobile US Inc.’s TMUS latest promotional plans seem to have heated up the nation’s wireless industry and can pose as threats to telecom behemoth Verizon Communications Inc.’s VZ customer base. (Read More)

Chico’s Stock Tumbles on Q1 Earnings & Sales Miss

Chico’s FAS, Inc. CHS reported first-quarter 2017 financial results, wherein both the top and bottom line missed the Zacks Consensus Estimate. (Read More)

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HPQ) Stock Analysis Report &gt;&gt;</a><br>&nbsp;<br><a href="https://www.zacks.com/registration/pfp?ALERT=YAHOO_ZER&amp;d_alert=ZER_CONF&amp;t=VZ&amp;ADID=YAHOO_content_ZER_ARTCAT_MARKET_NEWS&amp;cid=CS-YAHOO-FT-261929" rel="nofollow noopener" target="_blank">Click for Free Verizon Communications Inc. (VZ) Stock Analysis Report &gt;&gt;</a><br>&nbsp;<br><a href="https://www.zacks.com/registration/pfp?ALERT=YAHOO_ZER&amp;d_alert=ZER_CONF&amp;t=ECL&amp;ADID=YAHOO_content_ZER_ARTCAT_MARKET_NEWS&amp;cid=CS-YAHOO-FT-261929" rel="nofollow noopener" target="_blank">Click for Free Ecolab Inc. (ECL) Stock Analysis Report &gt;&gt;</a><br>&nbsp;<br><a href="https://www.zacks.com/registration/pfp?ALERT=YAHOO_ZER&amp;d_alert=ZER_CONF&amp;t=PX&amp;ADID=YAHOO_content_ZER_ARTCAT_MARKET_NEWS&amp;cid=CS-YAHOO-FT-261929" rel="nofollow noopener" target="_blank">Click for Free Praxair, Inc. (PX) Stock Analysis Report &gt;&gt;</a><br>&nbsp;<br><a href="https://www.zacks.com/registration/pfp?ALERT=YAHOO_ZR&amp;d_alert=rd_final_rank&amp;t=CHS&amp;ADID=YAHOO_content_ZRANK_ARTCAT_MARKET_NEWS&amp;cid=CS-YAHOO-FT-261929" rel="nofollow noopener" target="_blank">Click for Free Chico's FAS, Inc. (CHS) Stock Analysis Report &gt;&gt;</a><br>&nbsp;<br><a href="https://www.zacks.com/registration/pfp?ALERT=YAHOO_ZER&amp;d_alert=ZER_CONF&amp;t=TMUS&amp;ADID=YAHOO_content_ZER_ARTCAT_MARKET_NEWS&amp;cid=CS-YAHOO-FT-261929" rel="nofollow noopener" target="_blank">Click for Free T-Mobile US, Inc. (TMUS) Stock Analysis Report &gt;&gt;</a><br>&nbsp;<br><a href="https://www.zacks.com/stock/news/261929/stock-market-news-for-may-25-2017?cid=CS-YAHOO-FT-261929" rel="nofollow noopener" target="_blank">To read this article on Zacks.com click here.</a><br>&nbsp;<br><a href="https://www.zacks.com/" rel="nofollow noopener" target="_blank">Zacks Investment Research</a>" data-reactid="32">Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Click for Free HP Inc. (HPQ) Stock Analysis Report >>
 
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Click for Free T-Mobile US, Inc. (TMUS) Stock Analysis Report >>
 
To read this article on Zacks.com click here.
 
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T-Mobile’s Latest Assault On Verizon Could Pay Off

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T-Mobile recently announced a new limited-time promotion targeted at getting Verizon Wireless customers to switch to its network. The third-largest U.S. carrier is offering to pay (up to $1,000) the full balance of device payments and early termination fees for iPhone or Google Pixel users who have been on the Verizon network for over 60 days. While the plan does have some fine print, it remains one of the most attractive promotional offerings we’ve seen by a U.S. wireless carrier in recent quarters. In this note, we look at the potential financial impact of the plan and how it could impact the carrier.

We have a $66 price estimate for T-Mobile, which is in line with the current market price.

Costs Could Be In Line With Previous Promotions

Carriers typically spend liberally on postpaid phone subscriber acquisition and retention via device and billing subsidies, considering the better loyalty and higher ARPUs that these customers offer. For instance, we estimated that the limited-time iPhone 7 promotion that T-Mobile and other carriers ran last year potentially cost them as much as $450 per connection. The costs on the new plan could be lower, on average. While there might be scenarios of single-line customers with the priciest and most recent iPhone 7 Plus switching ($969 retail), T-Mobile estimates that Verizon customers, on average, owe roughly $315 on their device. Therefore, the overall cost per subscriber could be roughly in line with previous promotions and the $1,000 upper limit is likely to reached with multi-line connections, for which monthly billings are higher.

Capturing More High-Value Customers

As the promotion is targeted primarily at high-value customers – iPhone and Pixel customers on the Verizon Network are likely to have higher ARPUs compared to the industry average – they could sign up for more expensive T-Mobile plans. Additionally, T-Mobile requires these porting subscribers to sign up for its $15-per-month device protection plan, which is likely to be a high-margin offering. Although the carrier has indicated that customers can cancel this insurance at any time, if they choose to, it should help to partially offset the costs of the promotion.

The Branding And Perception Angle

While T-Mobile is offering a somewhat similar promotion to AT&T and Sprint customers (these plans will require customers to sign up for one of its device financing schemes), the deal is being primarily pitched to Verizon customers. T-Mobile was historically viewed as one of the weakest wireless networks, due to its spotty coverage in sparsely populated areas, while Verizon is perceived as having the best coverage and service. However, in recent years, T-Mobile has been steadily improving its performance, leveraging its growing low-band spectrum assets and its 4G focused capital expenditures. By targeting the promotion squarely at Verizon customers, T-Mobile is essentially pitching the strength of its rapidly improving network.

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T-Mobile Steps Up Its War on Verizon

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John Legere has made some new claims about his rival’s network while offering some of its customers a better deal.






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