Here's Why Verizon Communication Stock Fell On Thursday

Verizon stock dropped 3% today following the comments by CEO at an investor conference.

Verizon Communications Inc. stock dropped more than 3% on Thursday September 17 after the comments by company’s CEO and Chairman Mr. Lowell C. McAdam. The telecommunication company provided its idea related to future growth, depending on its network leadership.

Verizon Inc. thinks that its opportunity for growth in Internet of Things (IoT) and video looks achievable, keeping in mind its leadership and consistent investment in broadband and wireless networks. During an investor conference on Thursday, Mr. McAdam explains the broader idea of the company, provided its latest announcements related to the positioning of 5G wireless, fresh wireless products, and customer pricing simplification.

He also added that the customer demand is not at all matching up with Verizon old business model, which increases the transformation need. He noted that the company is emphasizing on growth in future with a reason to get consumer satisfaction by offering them what they require in the advanced world.

Particularly, he also said that Verizon Communication’s earnings for fiscal year 2016 might be at the similar level as fiscal year 2015, provided that the near term transformation impact. He thinks that the earnings will return to growth path by the end of fiscal year 2017. While, the company forecasts cash flows to stay robust, this causes in repetition of capital allocation preferences of shareholder returns and network investment.

McAdam also said that Verizon FiOS profits will remain robust. He said that it is expected that the telecommunication company will participate in 600 MHz auction. He believes that the consumers need skinny bundles, which are profitable for Verizon.

CEO of Verizon Communication has also confirmed that the company isn’t looking to acquire DISH Network Corp. He said, DISH is a big company, but not consistent with company’s business at all. The company also looks at Apple upgrade plan to be helpful for its cash flow.

As reported by Investor Business Daily, Mr. McAdam said at the conference, "I don't see us going out and buying network TV, that sort of thing. Digital media, which are the direction we're headed with mobile-first (video), are much smaller companies and wouldn't register in a big way with investors when we purchase them."

Provided all the updates and details in shareholder conference on Thursday, Verizon stock went red initially because of the update of fiscal year 2016 earnings to stay flat and change in consumer demand.

Verizon Communication was up 0.54% to $44.81 at close of market on Monday September 21. The Verizon stock news revealed that it is trading with rare volume as 16.13 million shares have been traded relative to average volume of 15.5 million shares.