Verizon Communications, Inc. (VZ)

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The Company is a provider of communications services. It has two reportable segments, Wireline and Domestic Wireless, which it operates and manages as strategic business units and organize by products and services.

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Avatar NetscribeTelecom (98.13) Submitted: 12/04/06 1:36 AM : Start Price: $32.52 VZ Score: 17.46

Verizon Communications operates through three divisions: Telecom, Business, and Wireless. Its telecom operations include nearly 140 million access line equivalents in 28 states of the U.S. Verizon Wireless, the company's joint venture with Vodafone Group, is the second largest wireless services provider in U.S., after Cingular Wireless, with 57.6 million customers. Verizon Business was formed in 2006 when Verizon bought MCI, creating a global advanced communications and information technology (IT) powerhouse to serve large business and government clients.

Verizon Telecom reported an excellent quarter. The company witnessed an addition of broadband and video customers, and its total customer base stood at 6.6 million. This was the fourth consecutive quarter, of 18% or better revenue growth, for the company as it focused on increasing its market share in the U.S. The company’s wireless and business segment delivered strong revenue growth, profitability, net customer additions, and low churn that were significantly ahead of the industry. The integration of MCI is also producing operational benefits for the company.

The market for wireline and wireless broadband in the U.S. is surging and the total broadband subscriber base is expected to reach 54 million by 2007. Over the years, Verizon has invested heavily in fiber optical cable networks, and higher-bandwidth capabilities such as DSL; these have given it a growing foothold in broadband market.

Verizon has announced the spin-off of its information services by Dec 2006, and the funds, thus, generated are expected to reduce the company’s outstanding indebtedness by approximately $7 billion, thereby improving its profitability toward its shareholders and maximizing the value of the shareholders.

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Avatar NetscribeTelecom (98.13) Submitted: 4/20/07 3:29 AM

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With worthy cash flows from continuing operations, company’s recent plans include share repurchases of $1.7 billion which is in line with 2006 buyback that will help the company boost its EPS. Verizon is targeting capital expenditures of around $17.5 billion in 2007 comprising of wireline and wireless capital expenditures of about $10.7 billion and $6.8 respectively thus upholding its place significantly ahead of the industry.

With strong operational and financial 2006, the company on its Q4 2006 release went on to say that the company is well-positioned to enter 2007 and continue to gain momentum.
On this note the company raised its estimates of MCI merger synergies to $900 million, from $825 million.

For December 2006, the largest U.S. wireless company in terms of revenues increased its top line by 27% to $88.14 billion supported by strong sales of wireline & domestic wireless segments. Net income from continuing operations decreased by 9% to $5.48 billion which was offset by an increase in cost of services, higher selling, general and interest expense. With already high subscriber base, Verizon increased its wireless subscribers by 15.0% to 59.1 million and wireline broadband connections to 7.0 million, of which more than 1.8 million net new broadband connections are added in 2006. The company continued to set industry records for low churn of 1.17% and ARPU of $50.78 up against the prior period.

Company’s revenue growth rates and operating margins have been just above the industry, with price to earning multiple lower than the industry’s; the company is on an expansion path which increases its prospects even further.

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Verizon Communications, Inc. (VZ)

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