Verizon Communications Inc. became the second major U.S. wireless carrier to disappoint with earnings this week after the company cut its full-year financial forecast on Friday.
Shares fell nearly 5% in premarket trading.
The company reported second-quarter net income of $5.32 billion, or $1.24 per share, compared with $5.94 billion, or $1.40 per share, in the year-ago quarter. On an adjusted basis, Verizon VZ, -5.39% posted earnings per share of $1.31, down from $1.37 a year earlier and a penny below the FactSet consensus of $1.32. Verizon said the most recent quarter’s profit included a $435 million pretax loss from special items.
Verizon’s revenue came in at $33.8 billion, roughly flat from a year earlier, while analysts tracked by FactSet had forecast $33.7 billion.
The company recorded a total of 12,000 postpaid phone losses last quarter, but noted that it had 215,000 such wireless losses in its consumer business. Verizon saw its retail wireless payphones drop from consumers to 0.93%.
Verizon cut its full-year outlook and now expects 8.5% to 9.5% growth in wireless revenue, as well as $5.10 to $5.25 in earnings per share.
During its first-quarter report, Verizon said it expects to come in at the “lower end” of the guidance it previously gave for revenue and adjusted earnings per share. These guidance ranges call for 9% to 10% revenue growth, as well as $5.40 to $5.55 in adjusted EPS.
Verizon’s results came after partner AT&T Inc. T, -1.90% delivered a mixed report a day earlier. AT&T saw strong growth in its postpaid phone network additions and signaled that pricing changes were having a positive effect, but management also pointed to some changing consumer behaviors as a result of worsening economic conditions and the company lowered its free cash flow outlook.
Read: AT&T earnings were ‘actually good’ despite stock selloff, analyst says
AT&T disclosed that some customers are becoming slower with their phone payments in light of the economy, one factor that contributed to the lowered free cash forecast. At the same time, AT&T said it doesn’t see bad debt costs significantly higher than they were before the pandemic, indicating to management that the company expects customers to still pay their bills, even if it’s a little slower than growth. of AT&T used during healthier economic times last year.
Verizon shares have lost 8% over the past three months as the S&P 500 SPX, +0.04% fell 6%.
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