Verizon Communications Inc. (NYSE:VZ) stock fell 1.40% (As on October 25, 11:26:27 AM UTC-4, Source: Google Finance) after the company posted third-quarter results that topped analysts’ predictions. It’s a sign that higher pricing and additions to its home internet and business phone units offset weakness among mobile phone consumers. Verizon added a net 100,000 mobile phone subscribers, compared to Wall Street’s estimate of 68,197. The gain was led by its business group. The consumer group lost 51,000 mobile customers, an eased decline from the previous quarter. The company’s home internet division saw strong growth, adding 384,000 wireless home internet customers, more than the 262,000 analysts expected, as well as 72,000 Fios wired home internet customers, compared with analysts’ expectation of 57,028. The gains brought Verizon’s total broadband subscribers to 10.3 million, including nearly 2.7 million customers of its wireless home internet, also known as fixed wireless.
Like its rivals, Verizon has faced slowing mobile demand amid broader headwinds in the telecoms industry. The companies have fiercely fought to steal away each other’s customers in recent years in a desperate hunt for growth. The company invested heavily in 5G airwaves that haven’t generated new mobile users. Before Tuesday, Verizon had lost about 200,000 mobile-phone customers since 2021, while T-Mobile has added more than 5 million, according to company filings. Verizon’s consumer unit accounts for the vast majority of the company’s revenue, and it’s betting on regaining those lost mobile subscribers, tapping nine-year company veteran Sowmyanarayan Sampath to lead the division earlier this year. Like other carriers, Verizon lost billions in revenue as smartphone sales dwindled in a reversal of the pandemic boom. Customers are content waiting longer between upgrades. Meanwhile, Verizon has turned to price increases, raising prices three times in two years and marking up its wireless home internet prices by $10. It also activated a fresh swathe of airwaves useful for fast connections. Verizon also contends with potentially high costs to clean up lead-covered cables in parts of its network.
VZ in the third quarter of FY 23 has reported the adjusted earnings per share of $1.22, beating the analysts’ estimates for the adjusted earnings per share of $1.18, according to an average of estimates compiled by Bloomberg. The company had reported the adjusted revenue of $33.3 billion in the third quarter of FY 23, which is inline with the analysts’ estimates for revenue of $33.3 billion.
New York-based Verizon also raised its guidance for the year, saying it expects free cash flow of above $18 billion, a $1 billion increase from its previously issued guidance.