Verizon is still not interested in following its chief rival — AT&T — down the road of trying to swallow a traditional media company, at least for now.
“I can say unequivocally, there is nothing going on right now with us considering a large media play,” Lowell McAdam, Verizon’s chairman and CEO, told analysts on the telco’s Q4 2017 earnings call Tuesday.
McAdam continued, “You have to look at whether being a big, independent distributor is a reasonable alternative to owning content,” adding, “being independent is a very good place to play for us right now.”
Disney’s $52.4 billion deal for 20th Century Fox sends the message that “scale matters,” McAdam said. But he indicated Verizon will wait for the dust to settle in the sector before deciding to make any major moves.
“We don’t even know whether [the proposed] AT&T [acquisition of Time Warner] is going to get approved,” McAdam said. The U.S. Justice Department is suing to block that merger, alleging it would be anticompetitive; the case is set to go to trial in March.
McAdam cited the telco’s recent deals with the NFL — a five-year pact giving Verizon mobile live-streaming rights to the league’s games — and the NBA as showing the company is working to be a “great partner” to monetize content rights.
Elsewhere on the M&A front, Verizon last year had been scoping out the possibility of acquiring a cable operator, with Charter Communications reportedly a target. In September, McAdam acknowledged Verizon had been interested bulking up its fiber-optic network footprint by buying a cable operator, but said it was no longer looking at such a transaction.
Overall, Verizon posted fourth-quarter 2017 consolidated revenue of $34.0 billion (up 5% year over year), edging out analyst expectations. Net income of $18.8 billion included a one-time tax benefit of $15.8 billion; adjusted earnings per share of 86 cents were slightly under Wall Street forecasts of 88 cents.
Q4 revenue for Oath, the division that combines AOL and Yahoo, was $2.2 billion. That was up 10% sequentially from Q3 on seasonal holiday spending in the last three months of the year. But Verizon didn’t disclose any comparison of how the Oath businesses performed year-over-year.
Also on the call, McAdam told analysts that the U.S. tax-reform law passed in late 2017 would be a boon to the telco. The legislation will boost cash flow from operations this year by $3.5 billion-$4 billion, Verizon predicts.