Verizon said its earnings may "plateau" in 2016 at the same levels as this year as the company handles the transition to new forms of mobile pricing and invests in new services. Speaking at an investors conference sponsored by Goldman Sachs, Verizon CEO Lowell McAdam said Verizon is "well-positioned for the future", but may seem some near-term impact on earnings due to the switch to new forms of flat-rate mobile pricing and installment plans for mobile phones. The sale of more of its wireline operations to Frontier, which is expected to close in the first half next year, will also impact 2016 results, as will costs for ramping up its new mobile video service and IoT services.
McAdam acknowledged that "consumer demand is disrupting Verizon’s traditional business models". To face this challenge, the company is "transforming around the capabilities of its high-performing networks". He said the goal is "future growth based on delivering what customers want and need in the new digital world". The operator expects cash flow to remain strong and said its priorities for capital allocation will be network investment, shareholder returns and returning the balance sheet to the level seen before it acquired Vodafone's stake in Verizon Wireless by 2018-19.
