Verizon Communications (NYSE: VZ) saw a decline in its stock price today following disappointing revenue results. The telecom company attributed this to weakness in wireless equipment sales and a slow phone upgrade cycle. As of 11:44 a.m. ET, Verizon’s stock had dropped by 4.3%.
Verizon’s core wireless service business showed steady growth, with revenue increasing by 2.7% to $19.8 billion. The company added 239,000 retail postpaid netphone customers and saw solid growth in its broadband business with 389,000 net additions. However, overall revenue remained flat at $33.3 billion, slightly below the expected $33.43 billion. Wireless equipment revenue fell by 8.1% to $5.3 billion.
The company also reported reaching its fixed wireless subscriber target ahead of schedule, with 4.2 million fixed wireless subscribers. On the cost side, Verizon incurred $2.3 billion in special charges, including $1.7 billion related to severance charges for layoffs.
Despite the release of the iPhone 16, smartphone upgrades slowed down, impacting bottom-line growth. Adjusted EBITDA increased modestly from $12.2 billion to $12.5 billion, while adjusted EPS fell from $1.22 to $1.19, slightly above the estimated $1.18.
Verizon’s CEO, Hans Vestberg, noted that new products such as myPlan, myHome, and Verizon Business Complete, along with a brand refresh, were resonating with customers.
Looking ahead, Verizon maintained its full-year guidance, expecting wireless service revenue growth of 2% to 3.5%, adjusted EBITDA growth of 1% to 3%, and adjusted EPS of $4.50 to $4.70. The company is also preparing to close its acquisition of Frontier Communications to expand its fiber footprint, a move that comes with some risks and regulatory hurdles.
While today’s earnings report did not raise any major concerns, the stock’s decline is likely due to the drop in revenue and EPS for the quarter.
In conclusion, Verizon faces challenges in the wireless market, but it remains focused on growth opportunities and maintaining its financial targets. Investors should consider these factors before deciding whether to invest in Verizon Communications.