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News >  Business

Verizon cuts profit, sales forecast after huge miss in wireless

July 22, 2022 Updated Fri., July 22, 2022 at 3:56 p.m.

A Verizon store is shown San Francisco on Jan. 21, 2021.   (Bloomberg )
A Verizon store is shown San Francisco on Jan. 21, 2021.  (Bloomberg )
By Scott Moritz Bloomberg

Verizon Communications Inc. cut its full-year earnings and revenue forecast as the largest U.S. wireless carrier struggles to keep pace with rivals that have made gains through heavy phone discounts.

Earnings per share, excluding some items, are now expected to be between $5.10 to $5.25 for the year, down from a range of $5.40 to $5.55, Verizon said Friday in a statement.

The company also reduced its forecast for service and other revenue, calling for as much as a 1% decline.

The outlook had previously been for flat revenue growth compared with a year ago. Both revised forecasts were below analyst estimates.

Second-quarter adjusted earnings per share were $1.31, missing the average analyst estimate of $1.33.

While revenue in the quarter matched estimates, Verizon added only 12,000 monthly wireless phone subscribers in the quarter, well below analysts’ predictions for 167,200 new phone customers.

Key insights:

• The news is another setback for wireless carriers after AT&T Inc. alarmed industry watchers Thursday with a warning that some customers are starting to delay paying their bills.

• Verizon is under pressure to retain its market lead.

The company returned to free phone promotions in an effort to counter discounts and giveaway by competitors AT&T and T-Mobile US Inc.

The New York-based mobile giant is also racing to catch up with T-Mobile on 5G service and expects to find new revenue by pursuing network contracts with businesses and facilities including shipping ports.

• In so-called fixed wireless, a relatively new segment of broadband service where signals are beamed directly to a home WiFi router, Verizon added 256,000 wireless internet subscribers.

T-Mobile had taken a lead in the race to serve wireless broadband to homes with more than 1 million internet subscribers as of April.

The wireless carriers’ introduction of a $50-a-month, high-speed alternative to landline broadband has been cutting into the cable companies’ most prized business.

Verizon shares fell 5.2% in early trading at 7:40 a.m. in New York.

The stock dropped 2.9% Thursday after AT&T’s earnings and is down more than 8% on the year.

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