Economy

Verizon shares hit a 10-year low Friday after reporting third-quarter results

October 23, 2022
Cecilia Weber

The largest wireless carrier in the United States learned a bit about the underlying economy during the third quarter. After raising management fees for postpaid subscribers by $1.35 to $3.30 per voice line, the number of consumer postpaid phone subscribers declined by 189,000 year-over-year during the third quarter with a momentum of 0.8%. Momentum is the percentage of subscribers (sometimes in a certain category) who leave one carrier for another and has risen in the quarter due to higher management fees.

53% of Verizon subscribers own a 5G-capable device

In the consumer segment, approximately 53% of Verizon postpaid wireless subscribers owned a 5G-capable device during the third quarter. While the carrier has had to contend with high infrastructure costs due to the seemingly endless 5G rollout, pricing will have to be watched closely thanks to fierce competition between Verizon, T-MobileAnd the AT&T. And later this year, Boost expects to launch its own endless service that will do just that Offering 5G service in the US at a lower price than the Big Three.

On the business side, Verizon added 197,000 new postpaid subscribers in the three months. This has allowed it to register its fifth consecutive quarter with at least 150,000 new postpaid phone subscribers in its business unit. The volatility in the postpaid phone business in the business sector was 1.10%. Business Wireless Group revenue increased 5.7% year over year to $3.3 billion. The increase is due to higher prices and growth in the customer base.

Combining both the consumer unit and the business unit, the number of new net postpaid phone subscribers during the quarter increased to 8,000. This was well below Wall Street estimates Verizon To add a total of 35,000 net new postpaid subscribers during the quarter.

“We took a number of actions in the third quarter that helped improve operational and financial performance, but we know there is still more work to be done,” said Verizon Chairman and CEO Hans Vestberg. “The pricing actions we took earlier. This year, also as our new cost-saving program, has shown that we are thoughtful and strategic in our decisions to enhance our business.At the same time, we are focused on implementing our 5G strategy, as we cover every major market and accelerate C-Band network construction.We are on the way correct to reach 200 million pops in the first quarter of 2023.”

Meanwhile, Verizon’s chief financial officer, Matt Ellis, blamed higher plan prices for consumer outages, and said the “squeeze” will continue into the fourth quarter. Wall Street analysts focused on their comments. “The thing people forget is the biggest company in the industry, and they have the most customers losing every quarter,” said Michael Hodel, director of communications and media research at Morningstar.

Ellis also said that “the actions we have taken in the past two quarters are gaining momentum in the market. We expect to be able to build on that momentum going forward. Our financial discipline, combined with our healthy balance sheet, has enabled us to increase our earnings for the 16th consecutive year, which is The longest current streak of increasing profits in the US telecom industry.

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Verizon shares hit their lowest price in more than a decade

Overall, Verizon reported third-quarter revenue of $34.2 billion, a 4% increase over total revenue collected during the same quarter last year. Net income of $5.02 billion decreased 23.3% from $6.55 billion in net income reported during the third quarter of 2021. Diluted earnings per share decreased 24.5% from $1.55 during the third quarter of last year to $1.17 in the third quarter of This year.

Verizon already suffered a pre-tax loss of $881 million which included adjusting its pension obligations to reflect current stock pricing and adjusting certain assets related to the acquisition of TracFone.

Meanwhile, investors sent Verizon shares down $1.65, or 4.5%, on Friday to $35.35. Today’s low, $34.55, was the stock’s lowest in more than ten years. The 52-week high is $55.51 (which seems pretty far away) and the 52-week low is $34.55 that was reached on Friday.

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