Vonderours Verizon
Verizon is an interesting creature for me to follow. I watch their finances and just find them curious.
On the surface they are a delightfully profitable company generating about $13 Billion a year in net income. (Down about 25% per share over the last several years.)
You would expect such a company to use its cash to vertically integrate and to grow. But their income is relatively flat, their profit margins are up and down but mostly flat.
What I find so very curious is that their total assets are declining by about $10 Billion a year (over the last three years.) Their long-term debt has grown by about $5 Billion a year, annually over the past three years.
The most curious thing is that Verizon put about $5 Billion a year of assets on its books as “Intangibles & Goodwill”. I’ve never thought that intangibles and goodwill are easily accounted for, and how Verizon has $15 Billion more value in this area is hard for me to contemplate, considering how their network is degrading, how their customer base is declining, and how they just had 3 Billion accounts breached through their Yahoo division.
I’m not a finance guy, although I am also not an idiot. But it sure seems like a lot of the magic happening at Verizon involves adding a lot of seasoning to the process of cooking the books. Just my opinion, of course.
Phone companies are very concerning in general. I can say the 10 billion of assets they dropped in 2016 was borderline criminal and not worth what it was sold for. So lots and lots of discretionary cash floating around for someone at the top to siphon…$250 million cost a CFO his job at the suitor.