Verizon (NYSE:VZ) Finds Support in Wireless Margins, Postpaid Additions

In their fourth quarter report, Verizon Communications (NYSE:VZ) was found to have had support from their postpaid additions and wireless margins.

Nomura said, "Postpaid net additions and Wireless margins in 4Q were all better than both our and consensus expectations. Key to the initial read of investors will be 872K wireless net additions on stronger margins vs. our expectations for 724K and consensus of 634k. We expect the shares to react positively to the news today given outperformance virtually across the board. Nonetheless, we believe investors will be potentially more focused on the upcoming iPhone launch and the overall level of iPhone dilution in 2011 as well as the potential for a reversal of the dilution in 2012, a dynamic we are growing more skeptical on.

"The one area of softness was FiOS net additions and continued weakness in the DSL market. We continue to believe that Verizon manages FiOS net additions based on margin capacity, and is content to allow continued DSL defections...we expect the company will address network capacity issues, but leave financial and subscriber metric guidance largely untouched. Nonetheless, we hope to get some broad commentary on revenue and margin trends for 2011 and 2012."

Nomura Securities reiterates a "Neutral" rating on Verizon Communications (VZ), which was trading at $35.79, gaining $0.55, or 1.56 percent, as of 1:57 PM EST.