Verizon Communications Inc.(NYSE:VZ) Buys Out Vodafone


Dallas, Texas 02/27/2014 (FINANCIALSTRENDS) – Verizon Communications Inc.(NYSE:VZ) has since announced that it has bought out the 45% stake Vodafone held in Verizon Wireless. However, the telecom carrier was quick to point out that it would not repurchase shares for the next couple of years at least. The company will now follow stringent follow-up on its debit levels. For the purchase of Vodafone Group’s stake cost Verizon over $130 billion. Verizon’s immediate interests are in completing this debt, and will look to repurchase share a few years down the line.

Full control over wireless segment

Verizon Communications Inc.(NYSE:VZ) may be in the throes of heavy debt, however, the company expects to reap the benefits of sole ownership of the wireless vertical in the near future.

Verizon Communications Inc.(NYSE:VZ) will now be able to manage the Wireless services on its own.  It also allows the company to offer much competition in the wireless sector again. Current domination of this sector is AT&T  Inc, besides Sprint Corporation.

Verizon Communications Inc.(NYSE:VZ) will now be able to compete in this sector.

2014 outlook

Verizon Communications Inc.(NYSE:VZ) has since reported its financial outlook for 2014. The company is expecting at least a 4% growth rate since the projects it will work on will also correspondingly increase. The EBITDA margin for the Wireless as well as the Wire-line growth is expected to be higher. The operating income margin has been 26.5%, for the previous year.

Free cash flow

One of the important aspects for Verizon currently is to maximize its cash flow. The capital efficiency is expected to be an expression of capital expenditure-to-revenues ratio. This has begun to show long term improvement in this aspect. The CapEX in the revenue ratio has also showed an improvement of 13.8% for the period 2013. This has moved from the 14% that it held in 2012.