Shares of Verizon (VZ) slid Thursday morning as the telecom missed earnings expectations and shed subscribers in the first quarter . Along with first quarter results, CFO Matt Ellis discussed the carrier's launch of an unlimited plan and CEO Lowell McAdams' recent comments that the telecom is open to deals with Comcast (CMCSA) or Disney (DIS) on a call before the market opened on Thursday.
Earnings dropped more than 10% to 95 cents per share, below analyst projections of 99 cents, according to FactSet, and 96 cents, per Thompson Reuters. Sales declined more than 7% to $29.8 billion, below expectations of nearly $30.7 billion.
Verizon stock dropped 2.1% to $47.90 after the report, and are down almost 10% year to date.
"He was asked a question about if somebody called, would we take the call and would he have a conversation with them?" Ellis explained. "Of course we would."
"The wireless segment in particular appeared to be under significant pressure prior to [Verizon]'s unlimited launch," Wells Fargo analyst Jennifer Fritzsche noted in a Thursday report.
Ellis explained that Verizon made the "disciplined decision" to go unlimited as "competitive intensity escalated." In roughly the first half of the quarter, before the launch of the unlimited plans, Verizon lost 398,000 post-paid phone customers. In the latter half, however, Verizon gained 109,000 postpaid phones, putting it at a loss of 289,000 during the period.
"We saw an immediate impact in our business," Ellis said.
Meanwhile, Verizon said it plans to launch 11 pilots of 5g service, the next generation in wireless technology, in the second quarter. The telecom will use spectrum rights it acquired with the $1.8 billion purchase of XO Communications' fiber business in the trials.
Verizon opted not to buy spectrum in a recent government auction of mobile licenses, but has been linked to potential M&A scenarios that could increase its wireless bandwidth. The telecom reportedly considered challenging AT&T's $1.6 billion purchase of Straight Path Communications (STRP) and analysts have suggested it could pursue satellite company Globalstar (GSAT) , which also owns attractive spectrum.
Verizon said on the earnings call that it could not discuss the spectrum auction, and has previously declined to comment on Straight Path and Globalstar.