What Happened?
Shares of telecommunications giant Verizon (NYSE: VZ) jumped 5.1% in the afternoon session after the company reported second-quarter earnings and raised its full-year financial guidance.
The company announced it now expects full-year free cash flow to be between $19.5 billion and $20.5 billion, a significant increase from the previous forecast of $17.5 billion to $18.5 billion. Free cash flow, which is the cash left over after a company pays for its operating expenses and capital expenditures, is a key metric for investors, particularly for a high-dividend stock like Verizon. For the quarter, Verizon reported adjusted earnings per share of $1.22 on revenue of $34.5 billion, beating analyst expectations. The company also raised the lower end of its forecast for full-year adjusted earnings growth. While the company saw a net loss in postpaid phone subscribers, a closely watched metric, the strong financial outlook and improved cash flow forecast appeared to outweigh those concerns for investors.
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What Is The Market Telling Us
Verizon’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 8% on the news that the firm guided for weaker wireless subscriber growth in the first quarter (2025) due to "off-season promotions by competitors." Despite this, Verizon maintained its guidance for single-digit growth in annual phone upgrades, as it expected a rebound later in the year( 2025).
Verizon is up 6.6% since the beginning of the year, and at $42.87 per share, it is trading close to its 52-week high of $46.49 from March 2025. Investors who bought $1,000 worth of Verizon’s shares 5 years ago would now be looking at an investment worth $767.64.
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