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Verizon beats estimates on lockdown boost to phone, internet services
[NEW YORK] Verizon Communications on Friday beat estimates for second-quarter profit and revenue on strong demand for its phone and internet services as coronavirus-induced lockdowns prompted a rapid shift to remote working and learning.
Although stay-at-home orders cut down store visits, limiting new sign-ups in a quarter that was almost entirely spent under lockdown rules, a pick up in demand for internet services helped the company add more phone subscribers who pay a monthly bill.
In the second quarter, Verizon added 173,000 postpaid phone customers, well above analysts' average estimate of 61,200, according to research firm FactSet.
Total operating revenue fell 5.1 per cent to US$30.4 billion but beat the analysts' average estimate of US$29.93 billion, according to IBES data from Refinitiv.
The company attributed the fall in revenue to a decline in device sales in the quarter, hurt by lockdown-led store closures.
It has been gradually repopening stores and at the end of the quarter more than 60 per cent of company-operated retail stores were open, Verizon said in a statement.
In the previous quarter, Verizon bled 68,000 monthly paying phone subscribers as it had to quickly close 70 per cent of its stores.
Revenue in Verizon's media unit, which includes Yahoo, HuffPost and TechCrunch, declined 24.5 per cent in the second quarter to US$1.4 billion from a year earlier as companies cut down on advertising to rein in expenses.
Net income rose to US$4.84 billion, or US$1.13 per share, in the second quarter ended June 30 from US$4.07 billion, or US$0.95 per share, a year earlier.
Excluding items, Verizon earned US$1.18 per share, above analysts' average estimate of US$1.15.