Verizon Communications 2Q Profit Almost Unchanged as Revenue Rises — Update

By Dean Seal

Verizon Communications boosted quarterly revenue from wireless services and broadband subscriber growth, but reported a significant drop in prepaid wireless customers after a public assistance program expired.

The wireless carrier logged a 624,000 drop in pay-as-you-go plans that typically cater to lower-income consumers. Nearly two thirds of the losses came from the shuttering of the government's Covid-19-era Affordable Connectivity Program, which gave eligible households money to put toward the cost of a wireless or home internet plan.

The program's expiration on June 1 is expected to weigh on the results of other wireless and cable providers reporting in the coming weeks.

Total revenue ticked up about half a percentage point to $32.8 billion, missing analyst projections for $33.05 billion, according to FactSet.

Verizon shares slid 3.3% to $40.25 in premarket trading Monday. Shares had gained 10% year-to-date when the market closed last week.

Wireless service and other revenue boosted the company's top line, offsetting a drop in wireless equipment revenue from lower upgrade volumes. Total wireless service revenue climbed 3.5% year-over-year to $19.8 billion.

Verizon had a net gain of 148,000 postpaid phone plans, in which customers pay for service at the end of each month, compared with a gain of 8,000 in the year-ago quarter and ahead of analyst expectations for 94,600 net additions.

Excluding losses from Verizon's SafeLink Wireless brand, which offered access to government-sponsored connectivity benefits and programs, the company still recorded a net loss of 12,000 prepaid plans.

The company reported 391,000 net additions in its broadband business, which included 24,000 Fios Internet net additions.

Earnings for the quarter came in at $4.59 billion, or $1.09 a share, about flat with $4.65 billion, or $1.10 a share, in the same quarter a year ago. Stripping out one-time items, adjusted earnings were $1.15 a share, in line with the estimates of analysts polled by FactSet.

AT&T reports second-quarter results on Wednesday, with T-Mobile's report to follow next week.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

July 22, 2024 08:27 ET (12:27 GMT)

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