Why Verizon stock fell today
The telecom operator walked away with disappointing revenue growth in its first quarter report.
stock verizon (VZ -4.11%) The carrier is on the decline today after falling short of the top spot in its first quarter earnings report. The company also lost net postpaid subscribers in a seasonally weak quarter.
As a result, the stock was down 3.4% as of 11:36 a.m. ET on Monday.
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Verizon loses revenue
Verizon’s first-quarter performance wasn’t particularly problematic, but total revenue rose 0.2% to $33 billion, below the analyst consensus of $33.24 billion.
Wireless services revenue rose 3.3% to $19.5 billion in the quarter, but wireline and equipment revenue continued to decline.
Verizon also reported a decline of 68,000 retail postpaid net subscribers, but that decline was better than expected and the company added users on other devices as overall retail postpaid net additions increased by 253,000.
Broadband growth was strong with 389,000 net additions, including 53,000 Fios additions, and fixed wireless revenue, a strategic priority, increased nearly 80% to $452 million.
Ultimately, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased from $11.9 billion to $12.1 billion. Adjusted earnings per share (EPS) decreased from $1.20 to $1.15, but this beat expectations of $1.12.
CEO Hans Vestberg said: “We are on track to meet our financial guidance and deliver positive consumer postpaid phone net additions this year. Our fixed wireless subscriber base continues to grow rapidly and we ‘s network remains among the best in the industry.”
What’s next for Verizon?
For the full year, the company is seeing similar trends, targeting wireless services revenue growth of 2% to 3.5%, adjusted EBITDA growth of 1% to 3%, and adjusted EPS of $4.50 to $4.70. This compares to the consensus range of $4.58. It was $4.71 in the quarter a year ago.
The sell-off is somewhat surprising as the stock was higher in pre-market trading, but the decline may reflect a correction after the stock rose over the past six months as investors adjust to a “higher for longer” interest rate environment and interest rate environment. The reality is that Verizon’s revenue is still on track to decline this year.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
