By Chelsey Dulaney
Verizon Communications Inc.'s profit edged in above Wall Street
expectations in the second quarter, while its subscriber growth was
again propped up by tablet additions.
Shares fell 1.8% to $47.25 a share in premarket trading, as
revenue narrowly missed expectations.
The wireless carrier said it added 1.1 million postpaid wireless
subscribers in the quarter, coming in above the 1.06 million net
additions Wells Fargo had expected. But Verizon leaned heavily on
tablets for growth, continuing a recent trend for the industry.
But Verizon leaned heavily on tablets for growth, continuing a
recent trend for the industry, adding a net 852,000 tablets, above
the 850,000 Wells Fargo had projected.
Verizon's postpaid phone net additions were 321,000, as net
smartphone additions of 588,000 were offset in part by a net
decline of 266,000 basic phones.
Postpaid churn, or the rate at which customers cancelled
service, edged down to 0.9% from 0.94% a year earlier. Verizon said
it was its lowest churn rate in three years.
Verizon, the first big telecom company to report its earnings
for the quarter, has faced tougher competition as rivals like
T-Mobile US Inc. and Sprint Corp. have offered more generous deals
and paid subscribers to switch.
Overall, Verizon posted earnings of $4.23 billion, or $1.04 a
share, up from $4.21 billion, or $1.01 a share a year earlier.
Revenue grew 2.4% to $32.2 billion.
Analysts polled by Thomson Reuters had forecast $1.01 a share in
earnings and $32.5 billion in revenue.
In the latest quarter, Verizon added a net 26,000 FiOS video
subscribers and a net 72,000 FiOS Internet subscribers.
Verizon has been licensing programming aimed primarily at
millennials and younger viewers ahead of the launch of its mobile
video service later this year. Verizon's recent $4.4 billion
acquisition of AOL Inc. was in part to support the advertising
feature of its mobile video service.
Looking ahead, Verizon said it expects its revenue to grow 3%
this year.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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