NEW YORK – Verizon Communications Inc. missed fourth quarter profit estimates while adding more than a million new wireless subscribers, a possible precursor to challenges ahead as the company races against rivals in a costly nationwide expansion of next-generation 5G wireless services.
The company reported a fourth quarter profit of $5.2 billion, an increase from $2.1 billion one year prior. Earnings per diluted share totaled $1.23, compared with 47 cents one year prior.
The number of regular monthly wireless subscribers rose by 1.25 million, which includes new phones, hot spots, smartwatches and other connected devices, according to the statement. Analysts expected earnings of $1.15 a share and 1.23 million new wireless subscribers. Revenue of $34.8 billion was ahead of estimates and were higher than fourth quarter revenues of $34.3 billion one year prior.
Verizon shares dipped as much as 2% to $58.34 in New York trading Thursday.
Verizon’s gains in regular monthly subscribers were boosted by offering free limited-time access to the Disney+ video streaming service, as part of an enticement to get wireless customers to select higher-tiered unlimited data plans. The undisclosed cost of that promotion and the amount paid to Walt Disney Co. for each subscriber helped put a dent in the bottom line, as did declines in phone sales and a continued drag from its landline business.
The company took an early lead in 5G network technology, and now offers the mobile service in parts of 34 cities, including Providence, after adding Cincinnati, Little Rock, Arkansas, and Kansas City, Missouri, this quarter. Verizon will showcase 5G applications Sunday at the Super Bowl, with features like multiangle video and replays. The demo is part of a race against rivals T-Mobile US Inc. and AT&T Inc., which are hoping to hook new customers as more 5G phones arrive in the coming months.
On the year, Verizon reported a profit of $19.9 billion, an increase from $16 billion in 2018. Revenue for the year was $131.9 billion, a 0.8% increase from the previous year.
Verizon shares gained 9.2% last year, lagging behind AT&T’s 37% increase and the 29% increase in the S&P 500 Index.
Scott Moritz is a reporter for Bloomberg News.
