Verizon (VZ) surprised Wall Street today by reporting earnings of 60 cents a share which was a penny a share ahead of the consensus of analysts. Sales rose 10% to $27.3 billion which was also just ahead of projections. The stock is doing well today.
Even though these results are promising, I still urge caution on investing in this stock. I currently rate Verizon a Hold. The company has been drastically cutting back on costs. They shed 4,000 jobs last quarter and they’ll probably cut another 4,000 this quarter. Plus, AT&T (T) continues to add new wireless customers thanks to its exclusive deal for Apple’s (AAPL) iPhone.
I probably won’t raise VZ to a buy until I see solid evidence that the business is growing.