U.S. telecom Verizon (NYSE:VZ) reaffirmed its forecast for full-year profit and reported a wide topline miss, a small bottomline beat, and subscriber losses in its consumer business for the third quarter.
Shares of the company were up nearly 4% in premarket NYSE trading on Wednesday.
In the Consumer unit, Verizon saw 7,000 wireless retail postpaid phone net losses for Q3 vs. 18,000 additions last year.
According to Dividend Collection Agency, a contributing analyst to the iREIT+Hoya Capital investment group on Seeking Alpha, the losses are “a testament to the macro environment and stiff competition from peers.” The analyst continues to believe the company is positioned for “long-term success.”
“Going forward, their new CEO has to focus on executing to give shareholders faith that their acquisitions weren’t for nothing. If so, VZ could be on the path to $50 in the next 6 to 12 months,” the analyst said.
Wireless retail postpaid phone churn was 0.91%, and retail postpaid churn was 1.12%. ARPA was $147.91, up 2%. The consumer business also saw 47,000 wireless retail core prepaid net additions vs. 50,000 net additions in Q2.
Under Broadband, net additions were 306,000 during the quarter vs. 293,000 in Q2. Total broadband connections grew to more than 13.2M at the end of the quarter, up 11.1% from last year.
Verizon Business saw 110,000 wireless retail postpaid net additions vs. 65,000 additions in Q2. Operating income in the segment rose 12.7% to $637M.
For the three months ended September 30, the New York-based company earned a net income of $5.06B, or $1.17 per share, compared with $3.41B, or $0.78 per share, a year earlier.
On an adjusted per-share basis, it earned $1.21, marginally beating the average analyst estimate of $1.19 per share.
Wireless service revenue in Q3 was $21B, up 2.1% year-over-year; wireless equipment revenue was $5.6B, up 5.2%. Both metrics were below the consensus estimates.
Total revenue was up 1.5% at $33.8B but came short of expectations by nearly $500M.
Verizon continues to expect adjusted earnings per share growth of 1% to 3% for the full year.
According to calculations done by Seeking Alpha, if EPS grows 1%, it would miss estimates by 5 cents; if it hits the midpoint of the guidance, it would miss by just 1 cent; and at 3% growth, it would beat by 4 cents. The consensus estimate for 2025 adjusted EPS is $4.69. The company earned $4.59 apiece in 2024.
The company maintained the FY adjusted EBITDA growth forecast at 2.5% to 3.5%; cash flow from operations guidance of $37B to $39B (est. $37.81B); and free cash flow of $19.5B to $20.5B (est. $19.96B).
It has stuck to its outlook for wireless service revenue growth of 2% to 2.8% and a capital spending budget of $17.5B to $18.5B for 2025. The full-year guidance does not reflect any assumptions regarding the pending acquisition of Frontier, Verizon said.