- No. 1 U.S. carrier beat expectations for wireless margin
- Adds 449,000 phone users, fewer than projected by analysts
Verizon Communications Inc. added 1.5 million new subscribers and exceeded analysts’ profit estimates even as rivals pushed price cuts and promotions to lure customers away.
Fourth-quarter earnings excluding some items were 89 cents a share, the largest U.S. wireless carrier said in a statement Thursday. Analysts predicted 88 cents, the average of estimates compiled by Bloomberg. Sales rose to $34.3 billion, compared with a projection of $34.1 billion. Five analysts surveyed by Bloomberg estimated the company would add 1.4 million new monthly subscribers.
The results show Verizon holding its own against rivals AT&T Inc., T-Mobile US Inc. and Sprint Corp. in a slowing U.S. wireless market. To be sure, the New York-based carrier’s subscriber gains are about 30 percent less than a year earlier, underscoring the challenges of competing with aggressive price-cutting.
With T-Mobile having already announced better-than-expected subscriber figures for the fourth quarter, and Sprint expected to close 2015 with its first full-year of user gains, Verizon’s customer additions put the spotlight on AT&T. The No. 2 carrier, which will post its results Jan. 26, may have added 555,000 monthly subscribers in the quarter, a 35 percent drop from a year earlier, according to analysts.
For Verizon, the pressure on profit has forced it to pursue new sources of revenue. The company has introduced an advertising-supported mobile-video service called go90 (named for tilting small screens 90 degrees to watch videos), yet the service is still too small to offset the broader slowdown in wireless.
- Of the 1.5 million new monthly subscribers, 449,000 were phone customers. Analysts projected 520,500 new phone users.
- Wireless margin on earnings before interest, taxes, depreciation and amortization from service revenue was 52.9 percent, compared with an estimate of 51.42 percent.
- Average revenue per account was $148.30, lower than the $150.25 analysts had predicted.
- FiOS Internet and FiOS TV customers increased to 99,000 and 20,000, respectively, compared with 145,000 and 116,000 a year earlier.
Verizon shares rose 2.3 percent to $45.45 in early trading in New York.