Verizon shares rose almost 3% in pre-market trading on Tuesday
Verizon’s Q2 results offered a pleasant surprise, showing a rise in wireless subscriber additions as the carrier’s aggressive 5G build out began to pay off with more users upgrading to the newest network. As a result, Verizon shares rose almost 3% in premarket trading on Tuesday.
Verizon reported postpaid phone net additions of 8,000, retail postpaid net additions of 612,000, and a total wireless postpaid phone gross additions increase of 2% year-over-year. The carrier said this last increase was driven primarily by a 6.9% year-over-year growth in consumer postpaid phone gross additions. Verizon also reported a totally wireless service revenueof $19.1 billion, a 3.8% increase year-over-year.
In broadband, Verizon saw a total net addition of 418,000, which it said indicates a “strong demand for fixed wireless and Fios products.” Q2 2023 represents the third consecutive quarter that Verizon reported more than 400,000 broadband net additions. Verizon now has nearly 2.3 million subscribers on its fixed wireless service.
“In the second quarter, we showed progress in our key priorities of growing wireless service revenue, delivering healthy consolidated adjusted EBITDA, and increasing free cash flow,” said Chairman and CEO Hans Vestberg. Verizon’s free cash flow came in at $8 billion, surpassing analyst expectations of $5.05 billion.
However, Verizon’s total revenue and net income did not fare as well as both missed expectations. Total revenue fell 3.5% in Q2 to $32.6 billion, while net income fell 10.3% to $4.8 billion. Additionally, the carrier saw a total retail postpaid churn of 1.07% and a total consumer wireless retail postpaid churn of 0.95%.
Total consumer revenue for the second quarter was $24.6 billion, down 4.1%
year over year, which Verizon said was due to gains in Service and other revenue being offset by Wireless equipment revenue declines, and total business revenue was $7.5 billion, down 1.9% year over year.
Looking ahead, Verizon maintained its forecast for profit in the range of $4.55 to $4.85 per share in 2023 and stated that it expects wireless service revenue to grow between 2.5% and 4.5% in 2023.
“We look forward to extending our network leadership in the second half of the year by continuing our rapid C-Band deployment as we are laser focused on providing value to our customers,” said Vestberg. “The steps that we have taken to improve our operational performance are working, and we are confident that we will achieve our financial targets for the full year.”