Verizon: Earnings recap — and is it still a buy for dividend investors?and is it still a buy for dividend investors?

Verizon's (VZ:US) stocks dipped today following the telecom giant's first-quarter earnings report on 22nd April, which fell short on revenue expectations.

Additionally, the company experienced a decline in postpaid net subscribers during the traditionally slower quarter. Consequently, the stock tanked 4.67% on Monday.

Earnings Summary

Verizon's first-quarter performance showed some strengths, but there were areas of concern as total revenue saw a modest increase of just 0.2% to $33 billion, falling short of the analyst consensus of $33.24 billion.

While wireless-service revenue experienced a healthy uptick of 3.3% to $19.5 billion, wireline and equipment revenue continued their decline.

In terms of subscriber metrics, Verizon witnessed a loss of 68,000 retail postpaid net subscribers, which, though still a decline, fared better than expected. However, there was an overall increase in retail postpaid net additions of 253,000 when factoring in users added to other devices.

Broadband growth was robust, with 389,000 net additions, including 53,000 Fios additions. Additionally, fixed wireless revenue, a key strategic focus, surged by nearly 80% to $452 million.

Regarding profitability, adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) reached $12.1 billion, up from $11.9 billion. Adjusted earnings per share (EPS) decreased slightly from $1.20 to $1.15 but exceeded estimates of $1.12.

CEO Hans Vestberg expressed confidence, stating, "We are on track to meet our financial guidance and to achieve positive consumer postpaid phone net additions for the year. Our fixed wireless subscriber base continues to expand rapidly, and our network remains the industry leader."

Moving Forward for Verizon

Looking ahead to the full year, the company anticipates similar patterns, aiming for wireless-service revenue growth ranging from 2% to 3.5%, adjusted EBITDA growth between 1% and 3%, and adjusted EPS in the range of $4.50 to $4.70. This compares to the consensus range of $4.58 to $4.71 in the same quarter a year ago.

The unexpected sell-off occurred despite the stock's earlier rise in pre-market trading. However, this pullback could signify a corrective phase following the stock's gains over the past six months. Investors may be adjusting to a scenario of "higher for longer" interest rates and acknowledging the fact that Verizon's earnings are still projected to decline this year.

Is Verizon Still a Buy?

With VZ currently trading at $38.60 per share as of 22nd April Monday close, its dividend yield stands impressively at 6.89%, making it an appealing choice for investors seeking dividend income. This high yield is sure to catch the attention of investors seeking to invest in a reputable telecommunications company known for offering attractive dividends.

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