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  • 10.19.16

Verizon earnings preview: Silicon Valley entanglements weigh on the telecom giant 

If Verizon wanted to be mentioned in the same breath as Silicon Valley brand-names, it has certainly gotten its wish. When the New Jersey-based telecom giant announces its third-quarter earnings tomorrow morning, its relationships with Apple and Yahoo will be front and center.

Investors may be more forgiving when it comes to Verizon and Apple. Promotions related to the rollout of the iPhone 7 are expected to have reduced Verizon’s profit margins, but should have had the benefit of preventing wireless customer churn.

Yahoo, on the other hand, has gone from gutsy strategic acquisition (Verizon agreed to pay $4.8 billion for the company’s core business in July) to potential liability, after CEO Marissa Mayer revealed that 500 million user accounts had been hacked. Verizon’s general counsel suggested last week that the company may seek to negotiate a lower acquisition price, based on the argument that the hack has had a “material” impact on Yahoo’s value. 

Overall, analysts estimate Verizon’s revenue for the quarter at $31.1 billion, down 6% from Q3 2015, according to Thomson Reuters.

[Photo: Flickr user gt8073a]AH