Verizon Communications (NYSE:VZ) revealed on Monday that it experienced fewer-than-anticipated losses in wireless subscribers during the first quarter, attributed to the popularity of its flexible plans and bundled streaming services. The company’s stock rose by 2.5% in premarket trading following the announcement.
Between January and March, Verizon reported a loss of 68,000 monthly bill-paying wireless phone subscribers. This figure surpassed expectations, with analysts estimating a loss of 100,000 according to FactSet, and marked an improvement from the 127,000 losses reported in the same period last year.
Verizon’s myPlan option, which offers customizable features, garnered significant interest from customers, contributing to the company’s performance. Additionally, partnerships with streaming services, such as Disney(NYSE:DIS), Netflix(NASDAQ:NFLX), and Warner Bros Discovery’s Max (NASDAQ:WBD), have helped attract and retain customers. For instance, Verizon’s latest promotional bundle includes six months of free access to Disney’s services for select plans.
In December, Verizon began offering discounted subscriptions to Netflix and Max as part of some myPlan bundles, further enhancing its offerings.
The company’s consumer business witnessed its strongest first-quarter performance since 2018, reporting 158,000 wireless retail postpaid phone net losses compared to 263,000 losses in the same period last year.
Verizon CEO Hans Vestberg expressed confidence in the company’s outlook, stating, “We are on track to meet our financial guidance and to deliver positive consumer postpaid phone net adds for the year.”
Despite slightly lower-than-expected revenue of $33 billion for the quarter, analysts remain optimistic about Verizon’s resilience. The trend of customers holding onto their phones for longer periods due to economic uncertainty and a lack of major new features is expected to continue.
Verizon’s pricing strategy, though typically higher than competitors like AT&T(NYSE:T) and T-Mobile(NASDAQ:TMUS), has proven effective in retaining customers. Verizon’s solid performance in Q1 sets a positive tone for the telecommunications sector, with upcoming earnings reports from other industry players scheduled for later in the week.
Excluding items, Verizon reported a profit of $1.15 per share, surpassing analysts’ estimates of $1.12 per share.
