Verizon stock (NYSE:VZ) experienced a downturn following the release of its first-quarter 2024 earnings report, but quickly rebounded the next day. At 3:30 p.m. ET, shares were up 3%, reaching a peak increase of 3.6%. What prompted this swift turnaround?
Amidst the initial market reaction on Monday, Verizon’s shares initially saw a slight uptick before taking a dip and closing with a 3% loss for the day. However, a closer look at the quarter’s performance reveals a more nuanced story.
While the company reported a loss of 158,000 consumer postpaid subscribers, this was counterbalanced by gains of 389,000 broadband subscribers and 90,000 business phone subscribers. Additionally, the crucial metric of wireless services revenue, known for its high margins, saw a healthy uptick of 3.3% to $19.5 billion.
Management indicated that the implementation of price increases during the quarter was well-received, which is expected to contribute to the company’s ability to meet its earnings guidance of $4.50 to $4.70 per share for the quarter.
Despite no significant shifts in Verizon’s business fundamentals over the past 24 hours, investors may be responding to broader market trends. Today, interest rates declined following indications of a slowing economy, potentially signaling a forthcoming reduction in short-term interest rates by the Federal Reserve.
Verizon faces the challenge of refinancing debt in the coming years, likely at higher rates compared to the past decade. However, the prospect of higher rates coupled with a buoyant stock market appears to have contributed to the uptick in share prices. While the positive quarter and expectations of improved free cash flow in the latter half of the year may bolster bullish sentiment, this outlook is geared toward long-term investors.
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