Verizon Revenue Falls Below Views
October 20 2016 - 9:10AM
Dow Jones News
Verizon Communications Inc. on Thursday reported revenue slid
more than expected in the latest quarter as subscriber additions
plunged amid a pricing war that continues to weigh on the wireless
provider.
It was the second straight quarterly decline for the top line
after six years of growth, and shares lost 2.6% premarket to
$49.08.
Chief Executive Lowell McAdam, in the earnings report, said the
company was operating in "highly competitive markets."
Verizon, which has been chasing revenue growth through
acquisitions, in July said it would buy Yahoo Inc.'s Web assets for
$4.83 billion in cash, ending a drawn-out process for the
beleaguered internet company. For New York-based Verizon, the deal
adds another piece to the digital media and advertising empire it
is trying to build.
For the September period, Verizon said it added 442,000 net
retail postpaid wireless subscribers, a 66% drop from the
prior-year period. Postpaid churn, or the rate at which customers
canceled service, rose 11 basis points to 1.04% from a year
ago.
Revenue slipped 6.7% to $30.94 billion, below estimates for
$31.09 billion, according to Thomson Reuters.
In all, Verizon posted a profit of $3.6 billion, or 89 cents a
share, down from $4 billion, or 99 cents a share, a year
earlier.
Excluding certain items, adjusted earnings were $1.01 a share,
just above analysts' expectations for 99 cents a share.
Verizon's Fios TV and high-speed internet business, which has
been lagging, began to pick up. Verizon added a net 90,000 internet
customers in the quarter. It gained 36,000 video customers.
Verizon has been shifting its wireless customers to noncontact
plans that have a cheaper monthly service rate but require
customers to pay full price for their device, usually in
installments.
The percentage of phone activations on installment plans rose to
70% from 67% in the second quarter. Verizon said it expects that
rate to remain consistent in the fourth quarter.
Verizon, which has been facing rising competition, has warned
that earnings may plateau in 2016 as it works through changes it
has made to keep its wireless plans in line with rivals. On
Thursday, the company backed its guidance for 2016
earnings—excluding a 7-cent per-share dent from the work stoppage
during a union strike—to remain flat with 2015.
Yahoo on Tuesday posted an increase in third-quarter profit and
said usage of its email product has increased slightly since
disclosing a massive data breach that was announced last month,
rare bits of good news as it clings to the deal to sell itself to
Verizon.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
October 20, 2016 08:55 ET (12:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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