Verizon Reduces Margins on Apple Sales
Verizon Communications Inc (NYSE:VZ) is expecting a 500 basis decline in its wireless margins in the fourth quarter due to record high sales of the iPhone. AT&T (NYSE:T) is also having the same issue.
Margins get pressured due to the higher price of the hot selling handset compared to other phones. Verizon CFO Fran Shammo told an investor conference Wednesday that the company sold 4.2 million iPhones compared to only two million in the preceding third quarter. Sales were low in that quarter as customers held off buying new handsets pending the launch of the new iPhone 4S model. The iPhone 4S was launched by Apple (NASDAQ:AAPL) in mid-October – at $47.1 billion, iPhone now accounts for 43% of Apple’s revenues.
Here’s how these stocks are trading on the news:
Verizon Communications Inc. (NYSE:VZ): VZ shares recently traded at $38.84, down $0.37, or 0.94%. They have traded in a 52-week range of $32.28 to $40.48. Volume today was 12,737,322 shares versus a 3-month average volume of 13,880,400 shares. The company’s trailing P/E is 15.62, while trailing earnings are $2.49 per share.
AT&T, Inc. (NYSE:T): T shares recently traded at $30.36, down $0.07, or 0.23%. They have traded in a 52-week range of $27.20 to $31.94. Volume today was 21,579,641 shares versus a 3-month average volume of 24,696,500 shares. The company’s trailing P/E is 15.40, while trailing earnings are $1.97 per share.
Apple Inc. (NASDAQ:AAPL): AAPL shares recently traded at $418.18, up $4.74, or 1.15%. They have traded in a 52-week range of $310.50 to $426.70. Volume today was 6,984,638 shares versus a 3-month average volume of 15,347,000 shares. The company’s trailing P/E is 15.11, while trailing earnings are $27.68 per share.
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