Verizon tops estimates by adding 283,000 postpaid phone subscribers in Q3
The nation's largest carrier, Verizon Wireless, reported its third-quarter results today following the close of trading on the New York Stock Exchange. During the three-month period which ran from July through September, Big Red added 283,000 postpaid phone subscribers topping Wall Street estimates of 268,000. The company has been gradually reopening its retail stores in the states and has implemented social distancing in these locations using touch-less retail, appointment scheduling, and curbside pickup.
Verizon's Q3 numbers top Wall Street's expectations
Verizon, which just launched its national 5G service last week (too late to be included in the third quarter) was not able to generate any revenue from the launch of the new 5G iPhone 12 series during the third quarter as it usually would. Because the start of the pandemic forced much of Apple's supply chain in Asia to close for a few weeks, Apple pushed back pre-orders and the release of its new handsets. This negatively impacted Verizon's third-quarter although the bottom line is that the iPhone revenue Verizon lost out on in Q3 will show up in Q4.
Verizon launched its nationwide 5G network too late to be included in the third quarter of 2020
For example, the iPhone 12 and the iPhone 12 Pro pre-orders began on October 16th and those devices will launch on October 23rd. The iPhone 12 mini and the iPhone 12 Pro Max will both start pre-orders on November 6th with the release date for both models taking place exactly one week later on November 13th. All four new models support Verizon's national 5G network and its Ultra Wideband mmWave service. For the quarter, Verizon's wireless service revenue rose to $16.4 billion, up 0.3% on a year-over-year basis. Retail postpaid phone churn was .69%.
"We continue to demonstrate our strength and resilience by delivering very strong third quarter financial results," said Verizon Chairman and CEO Hans Vestberg. "We are energized by the transformational technology that our 5G Ultra Wideband and 5G nationwide bring. Our purpose-driven culture paired with our network leadership will shape the future, for the better."
Last month, Verizon announced that it was buying Tracfone, the largest MVNO in the country, for $6 billion. The deal has not yet closed so Tracfone's 21 million customers have not been added to Big Red's headcount. And just the other day, Verizon purchased rural carrier Bluegrass Cellular and its 210,000 customers. The deal might close as soon as the end of this year.
Verizon's media units, which include apps such as Huffington Post, Yahoo, and Tech Crunch, saw revenue decline by 7.4% during the quarter to $1.7 billion as companies cut their advertising budgets due to drops in demand from the pandemic.
Verizon customers purchased less wireless equipment than they did during last year's Q3 dropping consumer revenue for the period by 4.3% on an annual basis to $21.7 billion bucks. Total operating revenue amounted to $31.54 billion, an annual decline of 4.1% and total earnings per share (EPS) came to $1.05 for the quarter compared to EPS of $1.25 during the same quarter last year. COVID-19 took 5 cents a share off of the carrier's EPS number during the quarter. Excluding extraordinary items, Verizon reported net of $1.25 a share topping Wall Street forecasts of $1.22. Verizon expects to report total wireless service revenue growth of at least 2 percent on an annual basis for the fourth quarter.
The earnings report didn't have much of an effect on the Street that they call Wall. During regular trading hours, Verizon closed 50 cents or .87% lower at $56.75. The shares dropped 19 cents or .33% after the report was released.
With more stores coming back online, the launch of Verizon's nationwide 5G, and Apple's release of the 5G iPhone 12 series, the fourth-quarter numbers are bound to be stronger for Big Red. We should see that report released during the third week of January.