Strong subscriber growth amid successful 5G rollout led to better-than-expected earnings at Verizon (VZ), even though profits fell compared to the previous year’s quarter.

Key things

  • Verizon added 8,000 new wireless subscribers thanks to the successful rollout of 5G, compared to expectations for a loss of 11,000.
  • Consolidated net income for the second quarter was $4.8 billion, down 10.3% from the same quarter last year.
  • Adjusted earnings per share (EPS) of $1.21 were above the consensus estimate of $1.17.

Earn Verizon Get Wireless Boost

The company added an unexpected 8,000 net new wireless subscribers, compared with expectations for a loss of 11,000. That was attributed to the company’s successful 5G rollout, which reached 200 million U.S. customers in March. More customers have also upgraded their phones and switched to Verizon’s 5G network.

Broadband net additions reached 418,000, a significant increase from 268,000 in the prior-year quarter, driven by strong demand and high retention rates for Verizon Fios and Fixed Wireless Access (FWA) products.

Key Metric: Wireless Revenue

Verizon’s wireless plans are generally more expensive than their peers, and that was expected to impact subscriptions last quarter. Wireless revenue, a key metric reflecting subscriber growth, was $19.1 billion, up 3.8% from the same period a year ago. It is expected to grow 2.5% to 4.5% this year, the company said.

Why does it matter?

An unexpected boost in wireless services helped Verizon offset some headwinds to its earnings. Consolidated net income for the second quarter they reached $4.8 billion. While earnings were down 10.3% from the same quarter last year, on an adjusted basis earnings per share (EPS) $1.21 was above the consensus estimate of $1.17.

The upbeat news comes amid heightened industry scrutiny after The Wall Street Journal released a report earlier this month that claimed the nation’s largest telecommunications companies left behind a vast network of toxic lead cables that contaminated water and soil, impacting public health.

Verizon’s stock fell sharply after the news, falling 16% between July 5 and July 17 and about 14% so far this year. They bounced nearly 3% in premarket Tuesday after the company issued its latest earnings before giving up some of those gains in early trading.


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