Verizon Communications Inc (NYSE:VZ) stock traded lower on Tuesday after it reported fiscal third-quarter results.
Its sales growth was flat year over year, reaching $33.33 billion, marginally missing the analyst consensus estimate of $33.43 billion. Service and other revenue growth was offset by declines in wireless equipment revenue.
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Adjusted EPS of $1.19 beat the analyst consensus estimate of $1.18.
Total wireless service revenue was $19.8 billion, up 2.7% year over year, driven by pricing actions and growth from fixed wireless connections.
Postpaid phone net additions were 239,000. Verizon's retail postpaid net additions were 349,000.
The quarter saw 389,000 total broadband net additions. The company ended the quarter with 11.9 million broadband subscribers, up 16.0% year over year.
Verizon's total fixed wireless net additions stood at 363,000 in the quarter, beating Fact Set estimates of 218,100 aided by promotional offers and bundling 5G with streaming services like Netflix Inc (NASDAQ:NFLX), CNBC reports.
At the end of the third quarter of 2024, the company had a nearly 4.2 million fixed wireless subscribers base. The company reached its fixed wireless subscriber target 15 months ahead of schedule.
Total Verizon Business revenues were $7.4 billion, down 2.3% Y/Y. Total Verizon Consumer revenue rose by 0.4% Y/Y to $25.4 billion. Consumer wireless retail postpaid churn was 1.07%, and wireless retail postpaid phone churn was 0.84%.
Verizon Consumer clocked wireless retail postpaid phone net additions of 81,000, up from 51,000 net losses Y/Y. Verizon Consumer had fixed wireless net additions of 209,000.
Verizon's net income declined to $3.4 billion from $4.9 billion a year ago due to $1.7 billion in severance charges resulting from a voluntary separation program and other headcount reduction initiatives.
The consumer segment EBITDA margin improved by 60 bps 43.4%, attributed to service revenue growth and lower upgrade volumes, while the business segment EBITDA margin declined 30 bps to 21.8%, driven by wireline revenue declines.
Company-level adjusted EBITDA of $12.5 billion, up from $12.2 billion Y/Y.
Verizon’s year-to-date free cash flow was $14.5 billion, down from $14.6 billion Y/Y.
FY24 Outlook: Verizon reiterated a 2.0%–3.5% wireless service revenue growth. It maintained an adjusted EPS of $4.50 – $4.70 versus consensus of $4.57.
Price action: VZ stock is down 3.07% at $42.36 premarket at the last check on Tuesday.
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This article Verizon Q3 Earnings: Wireless Subs Boost with 5G Offers, $1.7B Severance Charge Hit To Profit, Reiterates Annual Outlook originally appeared on Benzinga.com
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