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Earnings Results: Verizon stock heads for sharpest drop in two years as earnings show ‘challenging’ path ahead

Verizon Communications Inc. showed a net loss of postpaid phone subscribers in its latest quarter, calling out “competitive dynamics within the industry,” though it said it had its best quarter of broadband net additions in more than a decade.

The company on Friday reported net income of $4.7 billion, or $1.09 a share, down from $5.4 billion, or $1.27 a share, in the year-prior quarter. After adjustments, Verizon
VZ,
+1.10%

earned $1.35 a share, down slightly from $1.36 a share a year prior. The FactSet consensus was for $1.34 a share.

Revenue rose to $33.6 billion, matching the FactSet consensus and up from $32.9 billion a year earlier.

The company posted $25.3 billion in consumer revenue and $7.7 billion in business revenue.

Shares were off about 2% in premarket trading Friday.

Verizon saw a total postpaid phone net loss of 36,000 subscribers. In the consumer business, it saw wireless retail phone net losses of 292,000, noting that gross additions declined 2% relative to a year earlier. Consumer wireless retail postpaid phone churn was 0.77%.

The company noted in its release that while “churn was steady,” its postpaid phone metrics were hurt by “competitive dynamics within the industry.”

Verizon called out 229,000 total broadband net additions, making for what it said was its best quarter in more than a decade on the metric. It had 194,000 fixed-wireless net additions.

The wireless giant now expects full-year reported wireless service revenue growth to fall at the lower end of its previously issued range of 9% to 10%. Additionally, the company anticipates that adjusted earnings per share will land at the lower end of $5.40 to $5.55, the range Verizon outlined in its prior earnings report.

Verizon’s report follows one a morning earlier from AT&T Inc.
T,
+4.01%
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which said that it posted its best first quarter for postpaid phone net additions in more than a decade. While acknowledging that rivals had yet to post their own results, AT&T Chief Executive John Stankey said he had the sense that the wireless industry “still remains pretty strong.”

Shares of Verizon have gained 3.5% over the past three months as the Dow Jones Industrial Average
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-1.05%

has risen 1.5%.

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