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Verizon Communications Inc. (VZ) - Get Verizon Communications Inc. Report shares jumped higher Tuesday after the group posted stronger-than-expected second quarter earnings and issued a solid full-year outlook.
Verizon said earnings for the three months ending in June came in at $1.20 per share on an adjusted, non-GAAP basis, well head of the consensus forecast of $1.14 per share. Revenue for the period was tabbed at $32.2 billion, the company said, topping analysts' estimates of $31.78 billion and rising 5.4% from the same period last year. The company added 398,000 new monthly-pay subscribers, topping the 352,000 estimate, while retail postpaid "churn" hit 0.75%, dipping under 0.8% for the fifth consecutive quarter.
"Verizon is extremely well-positioned for the future," said CEO outgoing Lowell McAdam, who will be replaced by current CTO Hans Vestberg on August 1. "Our financial and operating results for the first half of 2018 were strong, as evidenced by service revenue, earnings and operating cash flow growth delivered in a highly competitive marketplace."
Verizon shares were marked 0.65% higher in New York following the start of trading Tuesday and changing hands at $51.09 each, a move that trims the stock's year-to-date decline to around 3%.
Verizon said it expects full year revenues to grow at "low-to-mid single-digit percentage rates on a GAAP reported basis", with earnings guidance lifted to between 27 cents and 31 cents per share.
Verizon also said capital spending, including the commercial launch of its 5-G network, will be "closer to the lower end of the range of $17.0 to $17.8 billion", a modest decrease from the guidance it provided in April following its first quarter earnings.
Service revenues, the company said, grew by 2.5% from the same period last year once the impact of a new revenue recognition rule was stripped out, a figure Verizon said was "driven by customer step-ups to higher access plans and increases in the average connections per account."
"Sequentially, service revenues increased 1.5%, excluding the impact of the revenue recognition standard," Verizon said.