Verizon reported third quarter adjusted earnings of $1.31 per share on Monday, beating analyst estimates, and raised its full-year guidance for the third consecutive quarter. Free cash flow reached $7.8 billion in the quarter, roughly twice what the company needs to cover its dividend.
The setup
Total operating revenue came in at $34.31 billion, up 1.5 percent year over year but slightly below the $34.77 billion analysts expected. The shortfall came from equipment revenue, which fell 9 percent as customers held phones longer and Verizon reduced device subsidies.
Adjusted EPS of $1.31 rose 8.3 percent from $1.21 a year ago and topped the $1.27 consensus. Reported EPS was $1.25, up 6.8 percent. Net income reached $5.3 billion, up 5.2 percent.
Shares slipped Monday on the revenue miss but recovered most of that move Tuesday, trading up about 1.9 percent near $43.93 in the afternoon.
Key numbers
The service side of the business carried the quarter. Mobility and broadband service revenue grew 2.9 percent to $23.5 billion, an improvement from 2.8 percent growth in the second quarter.
Cash flow from operations rose 2.2 percent to $11.5 billion. Free cash flow climbed 12.1 percent to $7.8 billion, lifting the free cash flow margin to 22.7 percent from 20.6 percent a year ago.
| Metric | Q3 2026 | Year over year |
|---|---|---|
| Total operating revenue | $34.31 billion | +1.5% |
| Adjusted EPS | $1.31 | +8.3% |
| Reported EPS | $1.25 | +6.8% |
| Mobility and broadband service revenue | $23.5 billion | +2.9% |
| Cash flow from operations | $11.5 billion | +2.2% |
| Free cash flow | $7.8 billion | +12.1% |
What the dividend coverage looks like
Verizon’s quarterly dividend stands at $0.7075 per share, or $2.83 annualized. At recent prices near $43.93, the stock yields about 6.4 percent, among the highest payouts in the Dow Jones Industrial Average.
The next payment goes out November 2 to shareholders who held the stock by the October 9 record date.
For a $100,000 position at $43.93, an investor holds roughly 2,276 shares and collects about $6,443 per year. The company paid $8.8 billion in dividends over the first nine months of 2026 while generating $18.0 billion of free cash flow, a coverage ratio of about two times.
Verizon also repurchased $4.0 billion of its own stock during the same period, bringing total capital returns to $12.8 billion.
What to watch
Guidance moved higher for the third straight quarter. Verizon now expects full-year adjusted EPS of $5.04 to $5.06, up 7.0 to 7.5 percent, and free cash flow growth approaching 12 percent.
Two risks sit on the other side of the ledger. Equipment revenue is shrinking by design, and the 73.7 percent payout ratio leaves less room for error if service revenue growth stalls. Debt also remains heavy, with the company carrying a debt-to-equity ratio near 1.4.
Bottom line
Verizon is doing what income investors want a high-yield stock to do: grow free cash flow faster than the dividend, buy back stock, and guide higher. The 6.4 percent yield arrives with real coverage. The trade-off is modest growth and a share price that has moved sideways. For retirees prioritizing current income, that trade-off has held up.
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