Verizon rebounds during Q2 as it reports a gain in net new postpaid phone subscribers
After reporting a net loss of 127,000 retail postpaid phone subscribers during the first quarter, Verizon rebounded and reported a net gain of 8,000 postpaid phone subscribers during the second quarter. The consumer end of the business reported a net 136,000 decline in postpaid phone subscribers during the quarter while the business segment added 144,000 postpaid phone subscribers from April through June.
The churn rate during the quarter for consumer postpaid phone accounts was flat at .76% compared to the .75% it reported during the same quarter last year. The churn rate for postpaid phone business accounts was 1.10%, up from the previous year's 1.07%.
The number of wireless prepaid accounts lost a net 304,000 subscribers while the churn rose to 4.24% from 3.90%. Prepaid churn is typically higher than postpaid since there are no contracts tying down these customers. Verizon now has 92.4 million wireless retail postpaid phone connections including both consumer and business customers. It has 21.6 million retail prepaid connections, off 6.4% from this same time last year.
Hans Vestberg, Verizon's Chairman and CEO, said, "In the second quarter, we showed progress in our key priorities of growing wireless service revenue, delivering healthy consolidated adjusted EBITDA, and increasing free cash flow. We look forward to extending our network leadership in the second half of the year by continuing our rapid C-Band deployment as we are laser-focused on providing value to our customers. The steps that we have taken to improve our operational performance are working, and we are confident that we will achieve our financial targets for the full year."
Verizon saw a rebound in the net addition of new postpaid phone subscribers during the second quarter
For the quarter, Verizon reported operating revenue of $32.6 billion, a decline of 3.5% year-over-year. Net income declined 10.3% to $4.77 billion and diluted earnings per share, which includes the issuance of all shares related to its stock-based compensation plans, declined to $1.10 a share from the prior year's $1.24.
The company noted that second-quarter earnings were negatively impacted by "a pre-tax loss from special items of approximately $598 million. This included a pre-tax severance charge of $237 million, the impacts of amortization of intangible assets related to TracFone and other acquisitions of $206 million, and a pre-tax asset rationalization charge of $155 million related to certain real estate and non-strategic assets that the company has decided to cease use of as part of its transformation initiatives."
Verizon's shares (VZW-NYSE) rose 26 cents or .77% during regular trading to $34.24. In after-hours trading, the stock lost 5 cents to $34.19 a share.
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