Verizon Communications (NYSE: VZ) reported Q3 EPS of $1.04, $0.02 better than the analyst estimate of $1.02. Revenue for the quarter came in at $33.2 billion versus the consensus estimate of $32.94 billion.

Wireless operational highlights

• Verizon Wireless reported 1.3 million retail postpaid net additions in third-quarter 2015, with improvements from second-quarter 2015 in the number of 4G smartphone and total postpaid phone net adds. These net additions do not include any wholesale or IoT connections.
• Verizon added 889,000 4G smartphones to its postpaid customer base in third-quarter 2015. Postpaid phone net adds totaled 430,000 as net smartphone adds of 694,000 were partially offset by a net decline of basic phones. Tablet net adds totaled 818,000 in the quarter, and net prepaid devices declined by 80,000.
• During the third quarter, 5.6 million phones were activated on device installment plans. Verizon has about 19 million device payment phone connections in total, representing approximately 22 percent of its postpaid phone base. Overall, more than 30 percent of Verizon's postpaid phone customers are on unsubsidized service pricing.
• At the end of third-quarter 2015, the company had 110.8 million retail connections, a 4.3 percent year-over-year increase, and 105.0 million retail postpaid connections, a 4.9 percent year-over-year increase.
• 4G devices now constitute more than 76 percent of the retail postpaid connections base, with the LTE network handling approximately 89 percent of total wireless data traffic in third-quarter 2015 – an increase of about 75 percent in network data megabytes in the past year.
• About 7 percent of Verizon's retail postpaid base upgraded to a new device in third-quarter 2015. In the past year, the number of 4G smartphones in Verizon's customer base has increased by about 34 percent, to 64.6 million. The company continues to see opportunities to upgrade its postpaid connections base of about 15 million basic phones and nearly 7 million 3G smartphones to 4G devices.
• Customer retention remained high, with retail postpaid churn at 0.93 percent in third-quarter 2015, a year-over-year improvement of 7 basis points.
• Wireless capital investment totaled $2.9 billion in third-quarter 2015 and $8.5 billion year to date, up 8.4 percent from a year ago, as Verizon continues to optimize its network. Densification plans, which include deployment of small cells, DAS (distributed antenna system) nodes and in-building solutions, are improving capacity in the near-term as Verizon prepositions its network for 5G.

Wireline operational highlights

• In third-quarter 2015, Verizon added 114,000 net new fios internet connections and 42,000 net new fios video connections. Both are increases from second-quarter 2015. Verizon had totals of 6.9 million fios internet and 5.8 million fios video connections at the end of the third quarter, representing year-over-year increases of 7.2 percent and 5.0 percent, respectively.
• Fios internet penetration (subscribers as a percentage of potential subscribers) was 41.7 percent at the end of third-quarter 2015, compared with 40.6 percent at the end of third-quarter 2014. In the same periods, fios video penetration was 35.6 percent, compared with 35.5 percent.
• By the end of third-quarter 2015, two-thirds of consumer fios internet customers subscribed to Quantum, which provides speeds ranging from 50 to 500 megabits per second. The highest rate of growth is in the 75-megabit-per-second tier, to which one-fourth of Quantum customers subscribe.
• Verizon Enterprise Solutions helped clients around the globe drive growth and business performance, manage risk and improve the customer experience in the third quarter. The company deployed innovative enterprise-grade network, cloud, security, IoT, mobility and other business solutions for some of the world's leading brands, including Ciena, Darden Restaurants and Waste Management; energy and utility clients Valero, E.ON, National Grid and Hawaiian Electric Industries; insurance clients Ageas and ACE Group; manufacturing and building clients Terex Corporation, Diebold, Incorporated, and Gilbane Building Company; healthcare clients Eli Lilly and Company, and Visiting Nurse Service of New York; and government and non-profit clients U.S. Army Reserve Command and the National Sheriffs' Association.

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