Verizon Communications Inc. (NYSE:VZ) shares are trading down in pre-market after the company delivered less than expected results for the first quarter. The result could have its impact on other telecom stocks like AT&T Inc. (NYSE:T), T-Mobile US Inc (NASDAQ:TMUS) and Sprint Corp (NYSE:S). Investors will be more concerned about the margin pressure on telecom service providers.
Verizon Communications reported adjusted earnings of 95 cents a share for the first quarter that included early debt redemption costs of 11 cents a share and a gain of spectrum license transaction. This fell short of analysts’ estimates by a penny. Last year, the company earned $1.06 a share.
The telecom service provider’s top line dipped 7.3 percent to $29.8 billion and came in below the Street analysts’ expectations of $30.49 billion. On a comparable basis, revenue fell about 4.5 percent.
The company claimed that its launch of Verizon Unlimited changed the customer additions trajectory favorably in the first quarter. The telecom firm pointed out a net fall of 307,000 retail postpaid connections that included 289,000 losses. Before the launch in February, the company’s post paid net loss was 398,000. After the launch, it could 109,000 retail postpaid connections.
Verizon’s postpaid connections base advanced 1.2 percent to 108.5 million while retail prepaid connections rose modestly by 50 basis points to 5.4 million. Overall traffic on LTE jumped about 57 percent extending its lead in the third-party network performance.
The company’s chairman and CEO, Lowell McAdam, commented, “To build on our loyal customer base and the third-party recognition we have received for network leadership, we extended our wireless and fiber network capabilities, began offering an unlimited pricing option and expanded our opportunities in new markets. We’re executing on strategies to capture future growth and create long-term shareholder value.”
Going forward, the company expects full year consolidated revenues to be fairly in consistent with the previous year. Similarly, the telecom firm expects its adjusted EPS to be similar to revenue trends.
At time of writing this, Verizon shares are trading down 2.10 percent