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The telecommunications industry is showing signs of life as large-cap stocks including: Verizon Communications (NYSE: VZ) When Charter Communications Inc. (NASDAQ: CHTR), It has recorded a strong uptrend for a month.
The two stocks are Telecom Services Select Sector SPDR Fund (NYSEARCA: XLC), which tracks the S&P sector of the same name. This ETF of his has seen the biggest gains on his 1-month basis, up +13.40%.
Verizon, a constituent of the Dow Jones Industrial Average, is the fourth most important stock in the S&P telecoms sector, up 4.19% last month and 9.85% over the past three months.
Verizon reported its fourth quarter on January 24, with earnings of $1.19 per share, down 11% from the year-ago quarter. Revenue was $35.3 billion, up 3%.
Those earnings were slightly below analyst expectations and above earnings views, according to data compiled by MarketBeat.
The company happened to report the day the New York Stock Exchange was temporarily suspended due to a trading suspension. The New York Stock Exchange attributes the failure to “manual error.”
It was eventually resolved, but Verizon probably didn’t see the exact same kind of trading as usual in the minutes and hours after the earnings report. Closed % higher, up 3.58% over the past week.
By 2023, the company expects total wireless services revenue to grow in the range of 2.5% to 4.5%. Adjusted earnings per share are expected to be in the range of $4.55 to $4.85.
Disappointing guidance, but also reason for optimism?
While the guidance disappointed some analysts, there was also reason for optimism. For example, Verizon says he expects capital spending to be significantly cut this year as the rise in C-band spending comes to an end. According to Verizon, the C-band technology will significantly improve the availability of his higher performing 5G connection. Chief Executive Hans Westberg said on an earnings conference call that the reduction in capital spending “will be a tailwind for free cash flow.”
Established giants like Verizon typically don’t offer the hot red growth opportunities that young tech stocks and other growth stocks do, but at least in a bull market, Verizon’s dividend yield is 6.33%, so income is An attractive candidate for investors seeking The company has an 18-year track record of increasing dividends.
Meanwhile, telecom industry peer Charter Communications posted even stronger growth since recovering from its December 19th low.
The stock had already started to move higher ahead of its fourth-quarter report on January 27th. MarketBeat’s earnings data show a net profit of $7.69 per share, missing Wall Street’s view. Revenue of $13.67 billion was also below expectations.
The stock has fallen 5.82% since the report.
According to the company, the number of personal Internet customers increased, albeit slowly, compared to the same period last year. The number of home wired voice customers declined at a faster rate. He said he added 615,000 mobile lines during the fourth quarter, compared to 380,000 additions in the fourth quarter of 2021. Its Spectrum Mobile service is available to all new and existing Spectrum Internet customers.
struggling to get traction
As you can see on the chart, Charter struggled to gain much traction in two separate rally attempts since October. Charter briefly crossed the resistance above his $403 on Jan. 27, shortly after the market opened, but quickly fell back.
You can see that the stock simply goes up, hits resistance, and then goes down. So at this point there’s really no discernible pattern.
Charter has a market cap of $64.74 billion, less than half the size of Verizon, which has a market cap of $173.24 billion. Charter is less volatile than the market at large, but its recent performance has been more volatile than his Verizon.
Both are posting strong gains at the moment, but it might be wise to wait for these stocks to post a more substantial rally before jumping in. buying range.
Additionally, investors who own S&P index funds already have exposure to both Verizon and Charter.
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