Verizon Communications Inc. became the second major U.S. wireless carrier to disappoint in earnings this week, as the company cut its full-year financial guidance on Friday.
Shares were down nearly 5% in premarket trading.
The company reported second-quarter net income of $5.32 billion, or $1.24 per share, compared with $5.94 billion, or $1.40 per share, in the prior quarter. On an adjusted basis, Verizon VZ, -5.94% reported earnings per share of $1.31, down from $1.37 a year earlier and a penny below the FactSet consensus, which was $1.32. Verizon said last quarter earnings included a pretax loss of $435 million for special items.
Verizon’s revenue came in at $33.8 billion, about the same as a year earlier, while analysts tracked by FactSet were modeling $33.7 billion.
The company posted a total of 12,000 net additions of postpaid phones in the last quarter, but noted that it had 215,000 wireless losses in its consumer business. Verizon saw consumer abandonment of postpaid phones in wireless retail reach 0.93%.
Verizon cut its full-year outlook and now expects wireless revenue growth of 8.5% to 9.5%, as well as earnings per share of 5.10 to 5.25 dollars
During its first-quarter report, Verizon said it expected to come in at the “lower end” of the guidance ranges it previously gave for revenue and adjusted earnings per share. Those guidance ranges called for revenue growth of 9% to 10%, as well as $5.40 to $5.55 in adjusted EPS.
Verizon’s results came after peer AT&T Inc. T, -1.64% delivered a mixed report a day earlier. AT&T saw strong growth in additions to its postpaid phone network and noted that pricing changes were having a positive effect, but management also pointed to some changes in consumer behavior in the wake of deteriorating conditions economic conditions and the company lowered its free cash flow outlook.
Read: AT&T earnings were ‘really good’ despite stock selloff, analyst says
AT&T disclosed that some customers were becoming slower with their phone payments in light of the economy, a factor that contributed to the reduced free cash forecast. At the same time, AT&T said it did not see bad debt charges materially higher than they were before the pandemic, and indicated to management that the company expects customers to still pay their bills even if it’s a little more. slower than AT&T had grown. used to last year during healthier economic times.
Verizon shares have lost 8% over the past three months, as the S&P 500 SPX, +0.17% has fallen 6%.