Verizon reports strong subscription growth, but Q2 profits fall

(Sharecast News) - Verizon reported lower second-quarter profits on Friday despite delivering its strongest consumer postpaid phone growth in five years, though earnings came in marginally ahead of market forecasts. The company said total postpaid phone net additions reached 184,000 during the quarter, including its best second-quarter consumer postpaid phone performance in five years.

Total mobility and broadband net additions exceeded 550,000, up by more than 230,000 from a year earlier, while broadband net additions rose 12.3% to 348,000.

However, total operating revenue slipped 0.7% year-on-year to $34.3bn, reflecting a sharp decline in equipment sales as customers held onto devices for longer and Verizon reduced spending on handset subsidies.

Consolidated net income fell 22.9% to $3.9bn, while earnings per share dropped to $0.92 from $1.18 a year earlier, largely due to $1.8bn of pre-tax special items. Adjusted EPS, however, increased 6.6% to $1.30, slightly ahead of the $1.28 consensus forecast.

Chief executive Dan Schulman said: "We're putting customers at the centre of every decision we make. With recent updates including our new Simplicity plans, Verizon One converged offerings, and an industry-leading loyalty program, we are gaining subscribers and earning long-term retention based on real value rather than subsidised promotions."

Shares were up 2.8% at $45.07 in early deals on Wall Street.