Verizon's Revenue Beat Doesn't Bode Well For Sprint, T-Mobile

Verizon Communications Inc. VZ and AT&T Inc. T, the two biggest U.S. wireless providers, have already reported Q4 earnings numbers, while smaller rivals Sprint Corp S reports on Tuesday and T-Mobile US Inc TMUS is expected to report on February 15.

A Look Back

Benzinga took a look back at past quarters to see if Verizon and AT&T’s sales numbers shed any light on what traders can expect from Sprint and T-Mobile.

According to Estimize, AT&T and Verizon’s revenue numbers have been mostly disappointing in the past two years. In Q4, Verizon beat consensus revenue expectations and AT&T missed. In the past eight quarters, there have only been four revenue beats between the two, none of which occurred in the same quarter.

It certainly appears as if wireless revenue may be a zero-sum game. Prior to Q4, only one time in the past seven quarters did at least two of the “big four” providers beat on revenue in the same quarter. In each of the other six quarters, there was a lone revenue beat among the group and three revenue misses.

Bottom Line

If that pattern holds up, Verizon’s Q4 revenue beat could be bad news for T-Mobile and Sprint.

The only two other times Verizon has delivered revenue beats in the past two years were Q4 and Q3 of 2015. In both of those quarters, both Sprint and T-Mobile missed on revenue for the quarter.