Is Verizon’s Stock a Buy Now?

E = Earnings Are Increasing Quarter over Quarter

Verizon reported financial results for the third quarter in October. Net income for the company jumped 14.3 percent to $4.29 billion (56 cents per share), compared to $3.54 billion (49 cents per share) a year earlier. Non-GAAP earnings came in at 64 cents per share. Verizon tends to report earnings mostly inline with estimates, but the general trend is slightly higher. Non-GAAP earnings in the third quarter of 2011 and 2010 came in at 56 cents per share. Earnings have been helped by solid revenue numbers. In the most recent quarter, revenue rose 3.9 percent to $29.01 billion. Revenue has climbed higher for the past two quarters.

Verizon also announced that it sold 3.1 million iPhones last quarter, with 651,000 units being the new iPhone 5. It most likely would have sold more iPhone 5 units, but Apple (NASDAQ:AAPL) has been dealing with supply issues. On the conference call, Fran Shammo, Verizon’s CFO, said that he expects Verizon to sell a higher volume of iPhone 5 sales in the current quarter. In a recent survey, Citi analyst Glen Yeung found that iPhone 5 inventories are improving, with Verizon models being widely available at 80 percent of the polled stores.

However, because carriers subsidize the highly popular smartphone, it will likely impact margins to some extent. During the third quarter, Verizon activated 6.5 million smartphones, more than any quarter in its history, with the exception of the fourth quarter 2011, when the iPhone 4S hit shelves.

This is one of the strongest components for Verizon within our CHEAT SHEET investing framework