NEW YORK – Verizon Communications Inc. exceeded Wall Street estimates for profit and subscriber growth in the second quarter, easing investor concerns as the company begins the costly process of launching 5G wireless services.
Total wireless subscribers rose by 451,000, which includes 245,000 new phone customers. The remaining additions were hotspots, smartwatches and other connected devices.
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Profit for the quarter was $4.1 billion, a decline from $4.2 billion one year prior. Revenue in the second quarter was $32.1 billion, a year-over-year decline from $32.2 billion.
Earnings per diluted share were 95 cents, compared with $1 in the second quarter of 2018.
Verizon faces a potentially different wireless market if T-Mobile US Inc. is able to complete its $26.5 billion takeover of Sprint Corp. The combination would make for a three-way race with Verizon, AT&T Inc. and T-Mobile to build and capitalize on new 5G service, with Dish Network Corp. entering the field as part of the deal.
If the deal goes through, T-Mobile and Dish will have their hands full with network integration and construction, Verizon Chief Financial Officer Matt Ellis said in an interview Thursday. “That will take time while they focus on those things,” he said. “Meanwhile, we will continue to do what we’ve been doing.”
Verizon took the early lead in 5G network technology, and now offers the advanced mobile service in parts of nine cities. Being first will start to pay off in revenue growth in 2021, Ellis said.
CEO Hans Vestberg, who took the helm a year ago after working most of his career at network-equipment maker Ericsson AB, has shrunk investments in areas like media and advertising to focus more on network expansion, particularly toward 5G technology.
The shares rose as much as 3.7% to $57.29 in New York trading Thursday. The stock was down 1.7% this year through Wednesday, lagging behind gains of around 19% by AT&T and the S&P 500 Index.
Scott Moritz is a reporter for Bloomberg News.
