Verizon Continues to Win Wireless Subscribers
October 19 2017 - 9:20AM
Dow Jones News
By Austen Hufford
Verizon Communications Inc. gained wireless subscribers in the
latest quarter, as the telecommunications company worked to shore
up its largest unit in light of its weakening television
business.
Verizon reported a net increase of 603,000 retail postpaid
connections in its third quarter, including 274,000 phone
subscribers. The company had 115.3 million total wireless retail
connections, up from 113.7 million the same quarter last year and
114.5 million in the second quarter.
The company's revenue beat Wall Street expectations while
meeting analysts' estimates on profit.
Verizon shares rose 2.3% in premarket trading Thursday.
Earlier this year, Verizon, the nation's largest wireless
carrier by subscribers, unexpectedly brought back its unlimited
wireless plans for the first time since 2011. The unlimited plans
allow customers pay a flat rate for nearly unlimited monthly
internet usage on their smartphones.
In its latest quarter, the company continued to increase the
percentage of its total subscriber base that were on smartphones
and using high-speed wireless internet.
Revenue from the wireless business, Verizon's largest, fell 2.4%
to $21.58 billion, as the switch to unlimited plans continued to
weigh on service revenue. Still, the company said service revenue
trends were improving and had increased from the second
quarter.
Revenue at the wireline segment that includes its Fios service
grew 1.1% to $7.66 billion, boosted by its acquisition of XO
Communications.
Analysts are closely awaiting the release of Apple Inc.'s latest
phones, including the premium iPhone X. If popular, the new phones
could drive more customers to upgrade at Verizon but rivals could
also grab customers away with discounts. Still, promotions around
the latest iPhone have been softer than in previous years.
Verizon cited ongoing consumer shifts to over-the-top video
options and away from traditional television as the reason for
losing 18,000 Fios video customers in the quarter. That is more
that the loss of 15,000 in the second quarter and 13,000 in the
first quarter. It gained 36,000 in the third quarter last year.
In all, Verizon profit was the same as the third quarter last
year, with net income of $3.62 billion, or 89 cents a share.
Revenue grew 2.5% to $31.72 billion. Still, excluding
acquisitions and divestitures, adjusted revenue fell 2.3%.
On an adjusted-basis, earnings per share was 98 cents.
Analysts polled by Thomson Reuters expected adjusted per-share
profit of 98 cents on $31.45 billion in revenue.
As a mature business in a saturated market, Verizon is
increasingly looking to increase profits through spending cuts.
Verizon Chief Executive Lowell McAdam said in September that the
company is aiming to cut $10 billion in costs over the next four
years by moving to zero-base budgeting.
Verizon expects capital spending for 2017 to be at the lower end
of its $16.8 billion to $17.5 billion range.
During the quarter Verizon, which is the new parent company of
Yahoo, said that a massive data breach at Yahoo in 2013 was far
more extensive than previously disclosed, affecting all of its 3
billion user accounts.
Verizon also announced that it would shut the groundbreaking and
once-popular AOL instant messenger service later this year. On
Thursday, the company said the integration of AOL and Yahoo is
ahead of internal expectations.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 19, 2017 09:05 ET (13:05 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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