Verizon Communications (NYSE: VZ) reported Q4 EPS of $0.89, $0.01 better than the analyst estimate of $0.88. Revenue for the quarter came in at $34.3 billion versus the consensus estimate of $34.06 billion.

• New revenue streams from IoT are growing, with revenues of approximately $200 million in fourth-quarter 2015 and about $690 million for the full year. This is a year-over-year increase of 18 percent.
• Cash flows from operating activities totaled $38.9 billion in 2015, compared with $30.6 billion in 2014. Cash flows in 2015 included a non-recurring $2.4 billion related to the monetization of tower assets.
• Excluding the tower transaction, free cash flow (non-GAAP, cash flow from operations less capital expenditures) totaled $18.8 billion in 2015. Capital expenditures totaled $17.8 billion, up 3.4 percent from 2014.
• Consolidated operating income margin was 25.1 percent for 2015. EBITDA (earnings before interest, taxes, depreciation and amortization) margin (non-GAAP) was 37.3 percent for full-year 2015. Adjusted consolidated EBITDA margin (non-GAAP) for 2015 was 35.4 percent, an expansion of 130 basis points from 2014.

Wireless operational highlights

• Verizon Wireless reported 1.5 million retail postpaid net additions in fourth-quarter 2015 and 4.5 million for the full year. These net additions do not include any wholesale or IoT connections.
• Customer retention remained high, with retail postpaid churn at a low 0.96 percent in fourth-quarter 2015, a year-over-year improvement of 18 basis points. Churn was also 0.96 percent for the year, an improvement of 8 basis points from full-year 2014.
• Verizon added 906,000 4G smartphones to its postpaid customer base in fourth-quarter 2015. Postpaid phone net adds totaled 449,000 as net smartphone adds of 713,000 were partially offset by a net decline of basic phones. Tablet net adds totaled 960,000 in the quarter, and net prepaid devices declined by 157,000.
• During fourth-quarter 2015, 7.6 million phones were activated on device payment plans. Verizon has about 25 million device payment phone connections in total, representing approximately 29 percent of its postpaid phone base. Overall, more than 40 percent of Verizon's postpaid phone customers are on unsubsidized service pricing.
• At year-end 2015, the company had 112.1 million retail connections, a 3.6 percent year-over-year increase, and 106.5 million retail postpaid connections, a 4.4 percent year-over-year increase.
• 4G devices now constitute more than 79 percent of the retail postpaid connections base, with the LTE network handling approximately 90 percent of total wireless data traffic in fourth-quarter 2015. Overall traffic on LTE increased by approximately 60 percent in fourth-quarter 2015, compared with fourth-quarter 2014.
• About 8.4 percent of Verizon's retail postpaid base upgraded to a new device in fourth-quarter 2015. At year-end, there were 73 million smartphones in Verizon's customer base.
• Wireless capital investment totaled $3.3 billion in fourth-quarter 2015 and $11.7 billion for the year, up 11.5 percent from 2014. Verizon continues to expand capacity and optimize its network, as the company prepares to pilot 5G technology in 2016.

Guidance:

Sees FY16 capital spending of $17.2 - $17.7 billion and FY16 consolidates adjusted EBITDA margin consistent with FY15.

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