Verizon Communications’ stock faced a notable decline on Monday, plummeting by as much as 7.5% to $39.21. This drop positions the stock on track for its largest percentage decrease since July 2023. The sharp fall followed a revenue miss that fell short of Wall Street’s expectations, marking a significant setback for the telecom giant.
Revenue Falls Short of Expectations
The company reported total revenue of $32.8 billion for the quarter, reflecting a modest increase of about 0.5%. However, this figure fell below analysts’ forecasts of $33.05 billion, as per FactSet. Despite seeing a slight revenue uptick, Verizon struggled to meet market expectations.
Verizon’s revenue increase fell short of expectations, indicating persistent challenges in meeting market forecasts, according to wsj news.
Wireless Services Show Mixed Results
Revenue from wireless services and other sources contributed positively to the company’s top line, helping to counterbalance a decline in wireless equipment sales. The total wireless service revenue increased by 3.5% year-over-year, reaching $19.8 billion. This growth was bolstered by the performance of the company’s core services, even as equipment sales lagged.
Stable Earnings Despite Revenue Miss
Verizon Communications reported quarterly earnings of $4.59 billion, or $1.09 per share, which remained relatively stable compared to $4.65 billion, or $1.10 per share, in the same quarter last year. Adjusted earnings, excluding one-time items, matched analysts’ estimates at $1.15 per share, demonstrating resilience in its earnings performance despite the revenue shortfall.
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Customer Gains and Losses
On the customer front, Verizon achieved a net gain of 148,000 postpaid phone plans, surpassing last year’s 8,000 gain. The net additions exceeded the 94,600 forecasted by analysts. However, the company saw a decline of 624,000 pay-as-you-go plans. This drop is due to the end of the government’s Affordable Connectivity Program on June 1. The program had supported wireless and home internet plans, and its end may impact other providers soon.
Broadband Sector Performance
In the broadband sector, Verizon reported a solid performance with 391,000 net additions, including 24,000 net additions for Fios Internet. Despite challenges in other areas, the broadband growth reflects a positive aspect of the company’s overall performance.
The mixed results highlight ongoing challenges for Verizon, particularly in adapting to changes in customer demand and government policy impacts.
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