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Verizon Impresses in a Tough Wireless Environment

It remains the best-positioned wireless carrier in the industry and shares are currently modestly undervalued, writes Morningstar’s Mike Hodel.

We remain impressed by

The wireless competitive environment remains challenging, with

Growth in the fixed-line business was again modestly disappointing. Verizon added only 42,000 television customers during the quarter, down sharply versus a year ago despite the introduction of, and reportedly strong demand for, its Custom TV packages, which offer a stripped-down number of channels at a lower price point. The firm also added only 2,000 Internet access customers during the quarter, an indication that it continues to lose consumer market share overall. The enterprise business remains weak as currency effects and competitive pressure pulled revenue down 4.9%. Fixed-line margins were solid.

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About the Author

Michael Hodel

Director of Equity Research, Media & Telecom
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Michael Hodel, CFA, is director of communications services equity research for Morningstar Research Services, LLC, a wholly owned subsidiary of Morningstar, Inc. He covers U.S. telecom service providers and related firms, including AT&T, Verizon, and Comcast. His team covers media companies, global telecom service providers, and owners of telecom infrastructure, such as wireless towers and data centers.

Hodel joined Morningstar in 1998. Prior to his current position, he spent two years as a portfolio manager for Morningstar Investment Management, LLC. Previously, he served as a technology strategist responsible for telecom research, chair of Morningstar’s Economic Moat Committee, and a senior member of Morningstar’s corporate credit ratings initiative.

Hodel holds a bachelor’s degree in finance, with highest honors, from the University of Illinois at Urbana-Champaign and a master’s degree in business administration from the University of Chicago Booth School of Business. He also holds the Chartered Financial Analyst® designation.

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