Verizon shares are down about 2% in premarket trading after the telco’s Q1 earnings report showed surprisingly few wireless consumers were turned on by the recent revival, after five years, of its unlimited data offering.
Analysts expected retail postpaid connections to grow. Instead they fell by 307,000 in the quarter to 108.5 million. The company noted that it added 109,000 after mid-February when it reintroduced the unlimited plan. Still, the number contrasts with a 640,000 gain in last year’s Q1.
The decline contributed to a 19.8% drop in net income, to $3.55 billion, vs the period last year, on revenues of $29.81 billion, down 7.3%. The sales number fell short of the $30.49 billion that Wall Street expected.
Earnings, at 85 cents a share, also were lower than the 96 cents analysts anticipated. The company says it would have recorded 95 cents if you factor out one-time developments including an early debt redemption and a gain on a spectrum license transaction.
Verizon’s FiOS video service lost 13,000 customers in the quarter, ending with 4.68 million, while the broadband offering added 35,000 for a total of 5.69 million.
AOL, the company says, “delivered solid seasonal performance” even though revenue — not including traffic acquisition costs — fell about 4%.
CEO Lowell McAdam said in a statement that in the quarter Verizon “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.”
