Verizon tops estimates, ASML surges on earnings beat and chip demand
On Wednesday, Verizon reported a strong start to 2021 as the company accelerates 5G growth, but lost more wireless subscribers than expected during the first quarter. Meanwhile, ASML — one of the biggest suppliers to semiconductor companies — topped estimates and raised its full-year sales expectations, citing strong demand amid a global computer chip shortage.
Video Transcript
JULIE HYMAN: We've got our eyes on some other earnings news that's come out this morning, one of them having to do with a company that it happens to be the parent of Yahoo Finance, but also helps people get their Netflix. That's how they get their connections. Verizon's what I'm talking about here. The company, as you can see, their earnings and revenue did beat estimates. But much like Netflix, what's also getting attention here is the wireless subscriber numbers, which were a decrease of 170,000 on a monthly basis.
It seems like, guys, some of the Verizon competitors have been offering discounts on phones, other ways to get new customers in. Verizon has been somewhat more resistant to that strategy. And it seems to have cost it in the quarter. Verizon shares this morning, they have been-- had been trading a little bit lower. Now they're trading a little bit higher. But overall, not a heck of a lot of reaction here. What stands out to you, Brian, when you look at these numbers?
BRIAN SOZZI: Well, that-- what you just mentioned, Julie, of course, top of mind. You've had T-Mobile, you've had AT&T being very competitive on price with these new Apple 5G iPhones. So that's a consideration. Also the Fios TV business continues to be under pressure for our parent company. But again, no surprise there. That has continued to be under pressure, as you see folks move to a more streaming environment.
But of course, have to give a shout-out to Verizon Media-- $1.9 billion in sales. We are part of that division as part of Yahoo Finance. Sales up 10.4% year over year, the second straight quarter of double digit growth there. And we are seeing an ad revenue recovery across media. And a lot of other media businesses have started to play in this recovery. And Verizon Media is one of them.
MYLES UDLAND: I still don't get 5G, honestly. I'm still kind of waiting for that. That's all I got on Verizon.
JULIE HYMAN: Yeah, I was surprised this morning when Brian told me he has 5G on his phone.
MYLES UDLAND: Right. I mean, am I--
JULIE HYMAN: I don't have 5G yet.
MYLES UDLAND: I'm not alone. Yeah, I'm not alone in this. I don't really-- I'm waiting. I'm waiting. Everything--
BRIAN SOZZI: [INAUDIBLE]
MYLES UDLAND: We just moved. Everything's the same.
BRIAN SOZZI: I upgraded to Apple 5G. It's a good phone. It's for me, I've noticed-- I've noticed the pick-up on speed. So maybe I've gotten a couple of few more things done faster. Let's just say-- put it this way. I'm looking forward to being more available in a lot more places. For me, [INAUDIBLE]
JULIE HYMAN: You doing more things faster is one of the scariest things I have ever heard, Brian Sozzi.
BRIAN SOZZI: I'm always looking for productivity.
JULIE HYMAN: I can't even conceive of that.
BRIAN SOZZI: Always.
JULIE HYMAN: All right, we also-- just one other tech company that I want to mention this morning, and that is ASML, which was also out with its numbers. And this is important because we're talking about chip equipment here. And obviously, we have had the big chip shortage having a lot of effect on the industry. It had an effect on ASML as well. The CEO basically said, chip shortage-- that's why we're doing well here.
So the company coming out, beating estimates, and also coming out with full year guidance that was positive, saying that 2021 revenue growth will be about 30% higher than a year earlier and that full year gross margin will be 51% to 52%. So that's something we're watching not just for ASML itself, but just as an indicator of the broader chip industry, which has come under a lot of scrutiny, of course.
