Verizon Q3 profit beats expectations

Oct 20, 2015, 11:55 AM EDT
People walk by the Dow Jones electronic ticker at Times Square in New York in this May 12, 2015 file photo. REUTERS/SHANNON STAPLETON/FILES

Verizon Q3 profit beat expectations at 9.3% on Tuesday. Verizon, which is the first big telecommunications company to report its earnings for the quarter, has faced tougher competition from rivals that has pushed it to slash prices and dim its revenue outlook, reports the Wall Street Journal. In the latest quarter, Verizon said it added 1.29 million retail postpaid wireless subscribers in the quarter, representing a 15% decline from the 1.52 million it added in the prior-year period. But Verizon said it saw improvements over the second quarter in the number of 4G smartphones and total postpaid phones it added.

Verizon said it added a net 430,000 phones in the quarter, as a decline in basic phones offset growth in smartphones. Tablets continued to fuel much of Verizon’s subscriber growth in the quarter, representing 818,000 net additions. Postpaid churn, or the rate at which customers canceled service, improved slightly to 0.93% from 1% a year earlier. At its FiOS business, Verizon added a net 114,000 Internet customers and 42,000 video customers, both representing double-digit declines from the prior-year period. But the results marked an improvement over the second quarter, when FiOS logged its lowest quarterly growth figures in years after launching so-called skinny bundles that provide fewer TV channels and allow customers to purchase select content packages. The new service drew anger from content companies.

However, Verizon's average revenue per account (ARPA) declined to $152.38 from $153.73, Reuters writes. As its ARPA comes under pressure, Verizon is entering new markets such as mobile video and "Internet of Things" - the concept of connecting everything from industrial machines to household devices to the Internet - to boost its earnings. Revenue from its Internet of Things and related offerings rose to about $175 million from $165 million in the prior quarter. Revenue from FiOS high-speed Internet, TV and phone service rose 7.5 percent from a year earlier to $3.4 billion.