Verizon Communications (VZ - Get Report) said Monday that it will split its operations into three separate units as it transitions its business toward the 5-G area amid a fierce battle for customers with rivals AT&T (T - Get Report) , Sprint (S - Get Report) and T-Mobile U.S. (TMUS - Get Report) .
Verizon said the three new divisions will separate consumer and business operations as well as creating a third Verizon Media Group/Oath unit that will house its media, advertising and technology business. The split, which will come into effect on January 1, follows a solid set of third quarter earnings for the biggest wireless carrier in the U.S thanks in part to promotional offers for the new Apple (AAPL - Get Report) iPhones as it added more telephone users to its network than analysts had anticipated.
"This new structure reflects a clear strategy that starts with Verizon customers," said CEO Hans Vestberg. "We're building on our network transformation efforts and the Intelligent Edge architecture to deliver new customer experiences and optimize the growth opportunities we see as leaders in the 5G era. We're focused on how our technology can benefit customers' lives and society at large."
Verizon shares bumped 0.5% higher Monday to $56.590 each, extending their year-to-date advance past 7.5% and valuing the New York, NY-based telecoms firm at around $234 billion.
Verizon said its consumer group would be led by Ronan Dunne, who currently heads Verizon Wireless, while the new business group would be sttered by Tami Erwin, who is the current VP of wireless operations. the media division -- which houses Yahoo and AOL -- is set to be run by current Oath CEO Guru Gowrappan.
Lat month, Verizon said earnings for the three months ending in September came in at $1.22 per share, well ahead of the $1.19 forecast and up 24.5% from the same period last year. Group venues were pegged at $32.6 billion, topping the consensus forecast of $32.5 billion.
However, retail post-paid wireless subscriber additions hit 515,000, shy of the FactSet forecast 545,000 and down from 531,000 over the second quarter. Postpaid phone additions, however, came in at 295,000, ahead of the 161,000 consensus estimate as the company took advantage of incentives to purchase Apple iphone contracts.
AT&T missed analysts' forecasts for its third-quarter earnings the following day, but added an unexpectedly high number of wireless subscribers following its $85 billion takeover of Time Warner Inc.
AT&T said adjusted earnings for the three months ending in September came in at 90 cents a share, shy of the 94 cent Street forecast, on sales that rose 15.7% to $45.7 billion.
The group held to its full-year earnings guidance, which it sees at the "higher end" of the $3.50 per share range and its free cash flow estimate at near $21 billion. However, the group said it added a net 69,000 new phone subscribers to its postpaid network in the United States, well ahead of the market's bet of a 22,000 decline, and noted that the WarnerMedia added around 5 cents a share to its bottom line.