By Chelsey Dulaney
Verizon Communications Inc.'s profit edged in above Wall Street
expectations in the second quarter, though mainstream wireless
subscriber growth slowed and revenue came in below forecasts.
Shares fell 2.3% to $47 a share in premarket trading.
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 growth slowed from a year
ago, when Verizon logged 1.4 million net additions.
And Verizon again leaned heavily on tablets for growth in the
latest quarter, continuing a recent trend for the industry. The
company said it added a net 852,000 tablets.
Postpaid phone net additions were a net 321,000, as smartphone
additions of 588,000 were offset in part by a 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.
Net additions for its FiOS services also slowed from a year
earlier.
Verizon added a net 26,000 FiOS video subscribers, down sharply
from 100,000 net additions a year earlier. Its FiOS Internet
service added a net 72,000 subscribers, down from 139,000 a year
earlier.
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., which closed in June, 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, while analysts expect 3.3% growth.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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