Verizon considers stock buybacks when leverage ratio hits target

By Robb M. Stewart

 

Verizon Communications Inc. will consider repurchasing its own stock when debt leverage is reached, as the company expects revenue to grow as its market expands.

Matt Ellis, chief financial officer of the New York-based technology and communications services company, told investors on Thursday that stock buybacks would be considered when Verizon reaches 2.25 times unsecured net debt to adjusted earnings. before interest, taxes, depreciation and amortization, which is slightly above a longer-term target range of 1.75 to 2 times.

The company said that by continuing to expand its 5G network and broadening its household and business fixed wireless coverage, with plans for new products and services, it expects to drive growth in services and others. revenues of about 3% this year, at least 3% next year and 4% in 2024 and beyond.

This growth, together with an expected reduction in capital intensity in 2024 after the conclusion of the initial construction of the “C-Band”, should lead to a rapid expansion of free cash flow and a reduction in the effect of leverage, Verizon said.

Mr. Ellis, in the text of the comments to investors, said the company’s capital allocation priorities were unchanged and remained to invest in the business, a commitment to the dividend, a strong balance sheet, then buybacks. actions.

Verizon said it will expand the availability of its 5G Ultra Wideband network to an expected 175 million people by the end of 2022.

Chairman and CEO Hans Vestberg said the company’s addressable market is expected to grow by another $120 billion over the next five years.

At Verizon’s Investor Day, the company said it has formed a strategic partnership with Meta Platforms Inc., formerly known as Facebook, which seeks to couple Verizon’s 5G Ultra Wideband network and cutting-edge computing capabilities. with Meta’s technologies to understand the requirements of metaverse applications.

Among other initiatives, the company also announced that it would offer its customers “+Play”, a direct-to-consumer platform to purchase and manage subscriptions in the areas of entertainment, audio, games, fitness and others. The platform will feature Netflix Inc., Peloton Interactive Inc. and other content partners.

 

Write to Robb M. Stewart at [email protected]

 

(END) Dow Jones Newswire

March 03, 2022 12:14 p.m. ET (5:14 p.m. GMT)

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Sallie R. Loera