Verizon Communications Inc said it had its best quarter of broadband net additions in more than a decade and lost fewer-than-expected monthly phone subscribers in the first quarter benefiting from hefty investments in expanding 5G services and new broadband networks.
The American wireless network operator reported a loss of 36,000 monthly phone subscribers in the quarter, compared with estimates for a loss of 49,300.
Meanwhile, Verizon chalked up 229,000 total broadband net additions, making for what it said was its “best quarter” in more than a decade on the metric. It had 194,000 fixed-wireless net additions.
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The company noted in its earnings release that while “churn was steady,” its postpaid phone metrics were hurt by “competitive dynamics within the industry.” The largest US wireless carrier is also facing heated competition from AT&T Inc. (NYSE:T) and T-Mobile US Inc (NASDAQ:TMUS).
Verizon reported net income of $4.7 billion, or $1.09 a share, compared to $5.4 billion, or $1.27 a share in the same quarter a year earlier. After adjustments, Verizon earned $1.35 a share, down slightly from $1.36 a share in 1Q 2021. The consensus was for $1.34 a share.
Strong demand for high-speed internet to facilitate hybrid work and education looks to have bolstered telecom firms bottom line though analysts reckon the torrid growth will start to ease as the coronavirus pandemic loosens its grip on the world.
Verizon has seen steady growth in demand for fixed wireless access (FWA), or home broadband delivered through a 5G network, in recent quarters.
The wireless carrier, however, cut its full-year sales forecast as rapid inflation and rising gas prices have coincided with a slowdown in-store traffic. Verizon changed its full-year guidance to expect wireless service revenue growth at the lower end of the previously guided range of 9% to 10%.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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