Best of StockTwits: Call me maybe? Verizon lower

Verizon had been riding a hot streak for a few weeks but mostly okay earnings were not enough to satisfy traders. AT&T fell too. But will it mean anything for iPhone sales?

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  1. By Paul R. La Monica
  2. Now that I've hopefully got you humming the Carly Rae Jepsen feel-good hit of the summer, let's take a look at telephone stocks! Verizon earnings were good but not great. And considering that shares have done really well this year, it's not a huge shock that the stock is selling on the news. AT&T, which reports earnings next week, took a hit too.

    Both stocks have been solid performers this year.
  3. Part of it is due to hopes that iPhone and Android sales will continue to sizzle. But Ma Bell and the stock some call Big Red ... although if you ask me the only real Big Reds are this and this ...
  4. ... are also doing so well because they offer great yields in a low-rate environment. AT&T and Verizon each pay dividends that yield more than 4%. So it's not really a matter of strong fundamentals, as some on StockTwits pointed out Thursday. Some even worry that Verizon's iPhone sales may be slowing.
  5. Verizon $VZ it sold 2.7 million iPhones in Q2, versus 3.2 million in Q1 and 4.2 million in Q4 $AAPL stks.co/d29j
  6. It shouldn't be a huge shock that iPhone sales are slowing. It seems that consumers are waiting for the next model (Will it be iPhone 5? "New" iPhone?) to come out sometime later this year. And that may not be a terrible thing for Verizon given that carriers have to sacrifice profit margins to sell the device. Just ask Sprint.

    Still, others note that slowing U.S. iPhone shipments may not mean that Apple is in trouble. Remember what happened last quarter? Investors worried because of supposedly weak sales at Verizon and AT&T. And then Apple blew away forecasts.
  7. $VZ is as irrelevant as US sales figures. The growth story with $AAPL is in China. Don't get hung up on VZ, you will miss the big story.
  8. True. But bringing it back to the U.S. telecoms, it does Verizon no good if Apple is selling a lot of iPhones overseas. And some worry that Verizon's stock has run too far too fast
  9. $VZ Here is something that makes no buiseness sense, trading 48 times earnings. Thats 5 times its true value, this will crash for sure.
  10. To be fair, that P/E is a trailing earnings for the past 12 months. Verizon looks more reasonable on a projected earnings basis. Still, it's not cheap at nearly 18 times 2012 earnings forecasts ... especially since earnings are only expected to rise a little more than 10% a year, on average, for the next few years.

    So call me maybe? How about never? Can you hear me now?
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