Verizon reported adjusted net earnings of USD 5.39 per share for 2021, up 10 percent and near the high end of its guidance. Operating revenues rose 4.1 percent to USD 133.6 billion, helped by growth in the mobile market and the takeover of Tracfone in November. For 2022, the US operator said it expects a further increase in adjusted EPS to USD 5.40-5.55 on organic revenue growth of around 3 percent.
CEO Hans Vestberg said the company met all its goals for 2021, including the USD 10 billion in targeted cost reductions. With its recent divestments and acquisitions and the expansion of the 5G network, the company has the assets in place to realise its growth strategy laid out in 2019, he said, adding that "2022 will be the most exciting year yet for Verizon".
Wireless drives customer growth
For the fourth quarter, Verizon reported revenues down 1.8 percent year-on-year to USD 34.1 billion, hurt by the sale of Verizon Media from 01 September. Excluding this, operating revenue grew 4.8 percent year over year. Adjusted EBITDA was flat at USD 11.8 billion.
In the Consumer market, quarterly revenues rose 7.4 percent to USD 25.7 billion, and adjusted EBITDA was up 4.1 percent to USD 10.3 billion. Business revenues were down 3.0 percent in the same period to USD 7.8 billion, and EBITDA dropped 7.4 percent to USD 1.8 billion.
Wireless remained the growth driver for the business, with the mobile customer base up over 18 percent in 2021 to 142.8 million at year-end. In Q4 alone, Verizon added 1.058 million retail postpaid subscribers, a 50 percent improvement on the year-earlier period, and postpaid ARPA was up 2.6 percent year-on-year to USD 144.88.
The operator's fixed-wireless services also helped it accelerate growth in broadband connections. Including Fios fibre, DSL and fixed-wireless, Verizon added a net 106,000 broadband connections in Q4. That included 78,000 new fixed-wireless subscribers, up from 55,000 net additions in Q3.
Wireless service revenues rose 6.5 percent year-on-year to USD 17.8 billion in Q4 and were up 4.7 percent over the full year 2021. For the new year, Verizon expects faster growth of 9-10 percent thanks to the Tracfone takeover, and excluding this wireless service revenue is forecast to grow at least 3 percent.
Lower underlying capex in 2022
The operator saw a small drop in cash flow from operations in 2021, to USD 39.5 billion from USD 41.8 billion, due to higher working capital for device payments and higher cash taxes. Capex reached USD 20.3 billion over the full year, driven by 5G expansion.
Verizon forecast capex excluding spending on the new C-band spectrum at USD 16.5-17.5 billion in 2022, down from USD 18.2 billion in 2021. Another USD 5-6 billion will go to phase 2 of deploying the 5G network in the C-band this year.
The outlook also expects a 2-3 percent rise in adjusted EBITDA this year, with growth held back by non-cash items, Verizon said. Amortisation of acquisition-related intangible assets will be excluded from adjusted EPS in 2022, leading to a 17-19 cents negative effect, compared to around 11 cents in 2021.
