Verizon Communications (VZ) - Get Report posted stronger-than-expected first quarter earnings Friday, and pulled its full-year sales guidance, after what it called a "significant" decline in customer activity linked to the coronavirus pandemic.
Verizon said adjusted earnings for the three months ending in March came in at $1.26 per share, a 5% increase from the same period last year and 3 cents ahead of the Street consensus forecast. Group revenues, Verizon said, slipped 1.6% to $31.6 billion, notably shy of analysts' estimates of a $32.4 billion tally, as it lost around 68,000 subscribers who pay a monthly phone bill.
Looking into the 2020 financial year, Verizon said it sees adjusted earnings growth in the region of -2% to +2%, and cautioned the customer delinquencies could have a 'material' impact on cash flows. Verzion said it boosted its bad debt reserve by $228 million in the first quarter "based on the expected number of customers who will seek payment relief under the Keep Americans Connected pledge."
"Verizon began 2020 with strong operational performance," said CEO Hans Vestberg. "In an unprecedented time, Verizon took decisive and balanced actions that will serve our stakeholders in the long term, including protecting our employees, maintaining our network quality and reliability, serving our customers, and supporting our communities."
"We will emerge from this crisis stronger, knowing we provided critical connectivity to our customers, and especially our first responders, while maintaining our commitment to investing in our 5G and Fiber strategies," he added. "We are particularly proud of our employees who continue to deliver essential services to our customers and those on the front lines so they can serve others."
Verizon shares were marked 0.35% lower in early Friday trading following the earnings release to change hands at $57.33 each.