Verizon Communications (NYSE:VZ) disclosed on Monday a better-than-expected performance in the first quarter, marked by fewer losses in wireless subscribers. The company attributed this success to the appeal of its flexible plans and bundled streaming services. In response to the announcement, Verizon’s stock surged by 2.5% in premarket trading.
During the period from January to March, Verizon reported a loss of 68,000 monthly bill-paying wireless phone subscribers. This figure exceeded analysts’ projections, which anticipated a loss of 100,000 according to FactSet, and marked an improvement from the 127,000 losses reported in the same period last year.
Verizon’s myPlan option, known for its customizable features, attracted significant interest from customers, contributing to the company’s performance. Additionally, partnerships with streaming giants such as Disney (NYSE:DIS), Netflix (NASDAQ:NFLX), and Warner Bros Discovery’s Max (NASDAQ:WBD) have played a pivotal role in attracting and retaining customers. Notably, Verizon’s latest promotional bundle offers six months of free access to Disney’s services for select plans.
In December, Verizon introduced discounted subscriptions to Netflix and Max as part of some myPlan bundles, further enhancing its offerings.
The company’s consumer business witnessed its strongest first-quarter performance since 2018, reporting 158,000 wireless retail postpaid phone net losses compared to 263,000 losses in the same period last year.
Expressing confidence in the company’s trajectory, Verizon CEO Hans Vestberg stated, “We are on track to meet our financial guidance and to deliver positive consumer postpaid phone net adds for the year.”
Although revenue slightly missed expectations at $33 billion for the quarter, analysts remain bullish on Verizon’s resilience. The trend of customers holding onto their phones for longer durations due to economic uncertainty and a lack of significant new features is anticipated to persist.
Despite typically higher pricing compared to competitors like AT&T (NYSE:T) and T-Mobile (NASDAQ:TMUS), Verizon’s pricing strategy has proven effective in customer retention. Verizon’s robust Q1 performance sets an optimistic tone for the telecommunications sector, with upcoming earnings reports from other industry players scheduled for later in the week.
Excluding items, Verizon reported a profit of $1.15 per share, surpassing analysts’ estimates of $1.12 per share.
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