Verizon lags far behind Wall Street's forecast of net new phone subscribers during Q2

On Friday, Verizon released its quarterly earnings report for the second quarter, and the nation’s largest wireless carrier reported a 9.1% year-over-year increase in Verizon Consumer revenue to $25.6 billion. That figure was helped by the TracFone acquisition, higher equipment revenues and revenue growth in the company’s core wireless service. The inclusion of TracFone’s revenue, coupled with an increase in average revenue per account (ARPA), helped increase consumer wireless revenue by 10.5% year-over-year.

Verizon’s net new subscriber gains for postpaid phones lagged far behind analysts’ estimates

While analysts expected the wireless carrier to announce 167,000 new postpaid phone subscribers joined Verizon over the three months, the actual number reported by Verizon for the quarter was a gain of just 12,000 net new subscribers. for postpaid phones. The churn rate for postpaid telephones was 0.81%, while the total churn for postpaid was 1.03%.

Verizon reduced its full-year estimated net income range

Hans Vestberg, chairman and CEO of Verizon, said in yesterday’s earnings call, “The inflationary environment is clearly impacting consumer behavior and we also saw increased competition for consumer attention.” The quarter, he said, was “not a good barometer for where Verizon has been or where it’s going.”

The executive also said: “As an industry leader, in a highly competitive industry, we are committed to improving our operational and financial performance for the second half of the year. With our network-as-a-service foundation, our new consumer mobility plans and recent price action, we are deliberate in our decisions to enhance our profitable growth opportunities today and in the future.”

Verizon lowered its estimate of wireless service growth in 2022 to reach between 8.5% and 9.5%, down from its earlier forecast of a 9% to 10% gain. The company also expects to spend an additional $5 billion to $6 billion in additional spending related to the carrier’s 5G C-band spectrum.

In the range from 3.7GHz to 4.2GHz, the C-band is considered mid-band spectrum and while it is not as fast as the mmWave spectrum, it goes beyond the latter, making it accessible to more subscribers. Previously, Verizon reserved its Ultra Wideband 5G designation for its mmWave spectrum that delivers download data speeds of up to 1 Gbps. But since mmWave signals only travel short distances, finding this cover was like looking for a needle in a haystack.

Verizon makes a change to its 5G service levels that will make Ultra WideBand 5G accessible to many more subscribers

Thanks to C-band and a smart move by Verizon, more subscribers can now access the carrier's Ultra Wideband service - Verizon lags far behind Wall Street's forecast of net new phone subscribers during Q2

Thanks to C-band and a smart move from Verizon, more subscribers can now access the carrier’s Ultra Wideband service

This writer, a Verizon subscriber, first connected to Verizon’s 5G Ultra Wideband service in Salem, Massachusetts, last week. A quick tap on Ookla’s Sppedtest showed I got a download speed close to 400Mbps.

Total operating income increased 0.1% to $33.79 billion from $33.76 billion a year ago. Net was down 10.7% from $5.95 billion or $1.40 per share to $5.32 billion or $1.24 per share. For the six months ended June, total operating revenue was $67.34 billion, compared to $66.63 billion last year. That is an increase of 1.1%.

Net income for the first half of the year weighed $10.03 billion (or $2.33 per share) versus $11.33 billion (or $2.67 per share). That was a drop of 11.5%. Verizon lowered its full-year earnings estimates to a range of $5.10 to $5.25 for adjusted earnings per share, lower than its previous expectation for adjusted earnings per share of $5.40 to $5.55.

“While recent performance has not met our expectations, we remain confident in our long-term strategy,” said Matt Ellis, chief financial officer of Verizon. “We believe our assets position us well to generate long-term shareholder value.” Speaking of value, Verizon stock fell $3.21 or 6.74% to $44.45 on Friday. In after-hours trading, the stock added 3 cents to $44.48.