Verizon's profit sinks as it loses wireless subscribers

22 April, 2017, 00:04 | Author: Elaine Woods
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That's down from $4.43 billion, or $ 1.06 per share, in the same period a year ago. On an adjusted basis, earnings per share was 95 cents. They led us to believe that the EPS would be 96 cents per share on revenue of $30.5 billion.

From the beginning of the year until the unlimited plan was unveiled on February 12, Verizon lost a net 398,000 regular monthly phone customers, by far the most it had ever lost in an entire quarter.

Verizon said Thursday the unlimited data plan "positively changed the trajectory of customer additions" in the quarter, but it still reported a net decline of 307,000 retail postpaid connections during the first three months of the year, including 289,000 phone losses. The category covers phones, tablets, smartwatches and other connections. Verizon has had quarterly losses in post-paid phone customers before, but not when other wireless connections are included.

Total operating revenue dropped to $29.81 billion from $32.17 billion a year earlier.

So yeah, the first quarter of 2017 was kind of a rough one for Verizon. Investors were not pleased with the news.

Verizon's shares were down 1.2 percent at $48.33 in midday trade.

Verizon, the once-unstoppable cellphone leader in the USA, lost key wireless customers for the first time, even as it brought back unlimited data plans to counter smaller rivals.

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Growth in the wireless subscribers has slowed down now that most Americans have a cellphone. T-Mobile and Sprint have been trumpeting their cheaper unlimited plans.

Verizon's stock is now down 10 percent this year while Sprint and T-Mobile are both up.

Verizon is now offering an unlimited data plan for the first time in more than five years.

Verizon unexpectedly brought back unlimited data plans in February, which it had stopped selling in 2011, seeking to blunt the appeal of similar offers from T-Mobile and Sprint. That's eroding Verizon's long-standing claim that it didn't need to compete more seriously on price - or offer unlimited data - because it had the far-superior network.

Wireless revenues continue to decline, down 5.1 percent to $20.9 billion. Verizon has also purchased AOL. The question now is, "What is the reason behind this loss of customers and the unlimited data plan?"

Earlier this week Verizon did a big deal for fiber from Corning for its nextgen wireless backhaul buildout and was talking up high profile merger possibilities with the likes of Comcast, Disney, CBS, and Charter.

In a call with analysts, Matt Ellis, the Chief Financial Officer of the company said - "We're confident in executing our strategy organically, but if there's the right opportunity out there to accelerate the strategy inorganically in a way that adds shareholder value, we're always looking at those opportunities".

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