Verizon Communications Inc. beat analysts’ estimates for profit and subscribers after a surprising turnaround in customer growth.
(Bloomberg) — Verizon Communications Inc. beat analysts’ estimates for profit and subscribers after a surprising turnaround in customer growth.
The largest US wireless carrier reported adjusted earnings per share of $1.21 in the second quarter, according to a statement Tuesday, down 7.6% from a year earlier. But that was still better than Wall Street estimates for $1.16 a share, according to a Bloomberg survey.
The company added 384,000 wireless home internet customers, more than the 256,700 analysts expected. Meanwhile, mobile phone customer growth returned with 8,000 new subscribers, while analysts were expecting a loss of 10,393.
The subscriber gains were a welcome boost for investors who have soured in recent years on Verizon and AT&T Inc. after over-inflated promises from 5G technology failed to result in massive consumer demand and network upgrades. Concerns over recently revealed potentially high costs to clean up lead-covered cables in parts of its network added to the companies’ woes.
New York-based Verizon has fallen behind its big wireless peers in subscriber growth over the past two years and has put Sowmyanarayan Sampath in charge of its consumer business in an effort to stabilize its largest unit. The company’s enterprise group was responsible for all of its mobile subscriber gains in the quarter while its consumer unit continued to decline.
Verizon is planning to raise wireless home internet prices by $10 a month this summer in an attempt to squeeze more profit out of what has been a popular package combined with a top-tier unlimited wireless plan.
The shares were little changed at $34.11 at 9:49 a.m. in New York. They are down about 14% this year.
Verizon, like other landline carriers including AT&T and Lumen Technologies Inc., faces spending possibly billions of dollars after a Wall Street Journal story earlier this month reported lead contamination in more than 2,000 network cables at locations across the country, including at playgrounds, bus stops and waterways.
AT&T and Verizon inherited the original, aging copper-wire networks that date back to the early 20th century from their predecessors. The companies now earn the bulk of their profits from fiber optic and wireless cellphone connections. Estimates for the potential cleanup and legal costs have varied widely among analysts, who are hungry for more details.
Verizon has started testing the locations identified by the Journal and says the company’s copper network is composed of less than 540,000 miles of cable. Lead-sheathed cable makes up a “small percentage” of that, the company has said.
The company reported revenue of $32.6 billion, down 3.5% from a year earlier. Analysts predicted sales of $33.3 billion. The company said it expects total wireless service revenue growth of 2.5% to 4.5% for 2023.
(Updates stock price in seventh paragraph.)
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