By Samrhitha A
(Reuters) -Verizon beat quarterly profit estimates on Tuesday on the back of lower costs and a surprise rise in wireless subscribers as efforts to grow its enterprise customer base and super-fast 5G network paid off.
The No. 1 U.S. telecom firm by subscribers also announced it was doing its own tests on sites identified by a damning Wall Street Journal report on lead cables abandoned over decades by telecom firms. Results may take several weeks, Verizon said.
“As a result of the age of this infrastructure and the history of the industry, records are incomplete as to exactly how much of the cable on our network has lead sheeting,” said finance chief Anthony Skiadas, adding that it was “far too soon” to make any projection on the potential financial impact.
Verizon shares were trading 0.9% higher. They are still down about 5% since the July 9 Wall Street Journal report, which also named AT&T among firms that left behind the potentially toxic lead cables.
“It’ll remain a cloud over the industry until someone can provide credible evidence of the financial or environmental impact,” Hargreaves Lansdown analyst Matt Britzman said.
Still, Verizon’s second-quarter results showed some signs that the company was recovering after a tough 2022, when cheaper offerings from rivals including T-Mobile slammed its growth.
The company, whose plans typically cost more than its peers, added 8,000 net monthly bill-paying wireless phone subscribers in the three months to June, defying expectations for a loss of 11,000, according to Factset.
Most of that was driven by continued strength in its enterprise-focused business, which reported postpaid phone net additions of 144,000 in the quarter.
Free cash flow, a metric closely watched by investors to help determine dividend payouts, came in at $5.6 billion, above estimates of $5.05 billion, according to Visible Alpha.
Total revenue fell 3.5% to $32.6 billion, missing analysts’ estimates of $33.24 billion, according to Refinitiv data.
Adjusted profit was $1.21 per share, above expectations of $1.16.
Consolidated operating expenses for the second quarter were $25.4 billion, down 3.3% year-over-year.
(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Anil D’Silva and Devika Syamnath)
