Verizon Communications
stock was rising Tuesday after the wireless carrier posted higher-than-expected earnings and predicted subscriber gains in the next quarter.
Verizon (ticker: VZ) reported a profit of $1.22 a share in the third quarter, beating forecasts for $1.18 a share, according to FactSet. Revenue of $33.3 billion declined by 2.6% from a year ago but matched analyst expectations.
Verizon stock shot 8% higher to $33.91, on pace for its largest one-day percentage increase since 2008 on Tuesday.
Telecom companies are battling for customers, Verizon’s subscriber base was a key metric to watch for in the report. Verizon reported a net gain of 100,000 for postpaid phone subscribers in the third quarter, ahead of the consensus call of 63,600 subscriber additions. The boost came from the business division, which reported 151,000 mobile customer additions. The consumer group lost 51,000 customers.
CEO Hans Vestberg, in a call discussing earnings, said “we anticipate that momentum will continue as we’re on track to exceed our postpaid phone net adds from quarter four of last year.” The company had posted 217,000 in the fourth quarter of 2022.
Part of the boost may be coming from new plans. In the past quarter, Verizon introduced Unlimited Ultimate, its priciest option at $100 a month for a single line without the AutoPay Discount. The plan includes higher mobile hotspot data and allows customers to add
Apple
Music or
Disney
Plus for an additional cost. Verizon also raised prices on some existing wireless plans at the end of August. Management has generally been reluctant to surrender ground on pricing as it seeks to maintain its profit margins.
AT&T
last week reported a net gain of 468,000 mobility postpaid phone subscribers for the quarter ended in September.
Both companies made Apple’s (AAPL) latest iPhone 15 available at the end of the latest quarter. AT&T has said customers upgraded to the new iPhones at a rate “higher than what we have seen in the last several quarters.” Verizon didn’t make specific comments on demand.
Verizon also raised its forecast for free cash flow to above $18 billion for 2023, beating expectations of $17.5 billion and a $1 billion increase from previously issued guidance.
The stock has a dividend yield of 8.3%, according to Morningstar. That means investors receive $8.30 in dividends each year for every $100 invested in the company’s stock. AT&T has a dividend yield of 7.4%.
Write to Karishma Vanjani at [email protected].
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