Shares of Verizon Communications Inc. (VZ) rose today after the telecommunications company surpassed earnings estimates for the third quarter.
Although the company announced operating revenue of $32.9 billion, up 4.3% from third-quarter 2020, the figure missed estimates by $340 million.
Accelerated 5G Adoption
Verizon's strong quarter was driven by strong sales in 5G devices. The company disclosed that currently more than one in four consumer wireless phone customers now have a 5G-capable device.
"We had a strong third quarter, delivering on our strategy and growing in multiple areas," said Verizon Chairman and CEO Hans Vestberg. "Our disciplined strategy execution demonstrated growth in 5G adoption, broadband subscribers and business applications."
The company's growth was also aided by Total Wireless, a mobile virtual network operator (MVNO) that partners with Verizon and uses its towers.
In the third quarter, total wireless service revenue reached $17.1 billion, a 3.9% increase year over year. The company attributed the increase to "higher access revenue, volume growth and products."
Rising Demand for Connectivity
Verizon reported a number of sectors that added subscribers, including 98,000 Fios Internet net additions, 267,000 phone net additions, and 223,000 other connected device net additions, offset by 67,000 tablet net losses.
Chief Financial Officer Matt Ellis, commented, "We are seeing strong demand for connectivity across our Consumer and Business segments as our Mix and Match and Business Unlimited value propositions, network quality and unique partnerships are resonating with both new and existing customers."
Numerous executives hailed the "Mix and Match" program, a new pricing plan under which the company is selling pay-TV, internet, and phone as standalone products, not bundles.
The company now expects adjusted EPS of $5.35 to $5.40, an update from prior guidance of $5.25 to $5.35.
VZ has a Fundamental Rank of 52. Find out what this means to you and get the rest of the rankings on VZ!
Verizon is now primarily a wireless business (more than 70% of revenue and nearly all operating income). It serves about 91 million postpaid and 4 million prepaid phone customers and connects another 25 million data devices, like tablets, via its nationwide network, making it the largest U.S. wireless carrier. The firm has agreed to acquire Tracfone, a wireless reseller that serves about 20 million prepaid customers in the U.S., from America Movil. Fixed-line telecom operations include local networks (12% of revenue) in the Northeast, which reach about 25 million homes and businesses, and nationwide enterprise services (10%). Verizon Media Group, the online media and advertising firm formed with the acquisitions of AOL and Yahoo, provides the remainder of revenue.
