Common-Size Income Statement
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Verizon Communications Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Revenue Composition
- Service revenues and other as a percentage of operating revenues showed a declining trend from 85.64% in 2020 to 80.11% in 2022, followed by a slight recovery to 82.78% in 2024. Conversely, wireless equipment revenues increased from 14.36% in 2020, peaking at 19.89% in 2022, and then declined modestly to 17.22% in 2024. Overall, the mix indicates a shift towards wireless equipment revenues during the earlier years, stabilizing thereafter.
- Cost Structure
- The cost of services decreased steadily from -24.48% in 2020 to -20.77% in 2024, indicating improved cost efficiency in service delivery. The cost of wireless equipment rose sharply from -15.43% in 2020 to a peak of -22.29% in 2022 and then decreased to -19.36% by 2024. Together, the combined cost of services and wireless equipment fluctuated but generally remained elevated near -40% of operating revenues, with a notable peak in 2022 (-43.21%) and a decline to -40.13% in 2024.
- Profitability
- Gross profit margin declined from 60.09% in 2020 to 56.79% in 2022, before improving to 59.87% in 2024. This reflects the impact of cost fluctuations on profit generation. Selling, general and administrative expenses decreased from -24.61% in 2020 to -21.45% in 2021 but increased subsequently, reaching -25.31% in 2024, suggesting rising operating expenses. Depreciation and amortization expenses remained relatively stable with minor fluctuations around -13% of operating revenues.
- Operating Income and Non-Recurring Items
- Operating income was strong in 2021 at 24.29% but experienced a decline to 17.08% in 2023, recovering partially to 21.28% in 2024. The presence of a significant Verizon Business Group goodwill impairment charge of -4.36% in 2023 negatively impacted operating results that year. Excluding impairment, the operating income trend suggests variability with recovery signs towards the end of the period.
- Other Income and Expenses
- Net periodic benefit costs fluctuated notably, with positive income components in 2021 and 2022, followed by a return to minor costs in 2023 and a small gain in 2024. Net debt extinguishment gains or losses varied with losses in 2021 and 2022 turning into slight gains thereafter. Interest expense was relatively stable around -3% in early years but increased markedly in 2023 and 2024 to nearly -5%, indicating rising financing costs. Overall, other income and expenses contributed variably, without consistent trends.
- Income Before Taxes and Net Income
- Income before provision for income taxes followed the pattern of operating income, peaking in 2021 (22.02%) and declining significantly in 2023 (12.68%), before partial recovery in 2024 (17.05%). Provision for income taxes remained in the range of -3.65% to -5.09%, with a slight decline in recent years. Net income attributable to Verizon showed growth from 13.88% in 2020 to 16.51% in 2021, slipped to 8.67% in 2023 amid operational challenges and impairments, then recovered to 12.99% in 2024. This volatility reflects overall earnings sensitivity to operational and non-recurring impacts over the period.