Verizon Stock Is Rising as Earnings Top Estimates

Verizon stock (ticker: VZ) was up roughly 1.3% shortly after Wednesday’s open, to about $53, following the earnings early that morning. The stock has lost about 7% this year after dividends, versus a 22% return for the

S&P 500.
The shares currently yield 4.9% annually. Rivals T-Mobile US (TMUS) and

AT&T

(T) have lost about 12% and 4%, respectively.

Verizon reported $1.55 in earnings per share in the third quarter, ahead of analysts’ average estimate of $1.35 and up from $1.05 in the same period in 2020. Adjusted for one-time costs and benefits, Verizon earned $1.41 per share last quarter, versus Wall Street’s $1.37 consensus and $1.25 a year ago.

Revenue came in at $32.9 billion, about $700 million above the average forecast and up by 4.3% year over year. The third-quarter 2021 figure includes two months of Verizon Media revenues; the majority of the division was sold later in the period.

Verizon’s adjusted earnings before interest, taxes, depreciation, and amortization—or Ebitda—were $12.3 billion, narrowly ahead of consensus, and its net income was $6.6 billion, about $1 billion more than the average call among analysts. Those profit figures were up 3.3% and 45.5%, respectively, from the third quarter of 2020.

Verizon has managed to increase its revenues and earnings this year despite volatile performance on the subscriber-growth front: A decline in customers in the first quarter of the year was followed by a big beat in the second quarter. For the first half of 2021, Verizon added 24,000 postpaid subscribers—an all-important metric for wireless companies that refers to subscribers who receive a monthly bill.

For the third quarter reported Wednesday, Verizon said it added a net 699,000 postpaid subscribers, well ahead of Wall Street’s 435,700 consensus estimate. About 429,000 of those were postpaid phones, while analysts as a group had been looking for 310,600. Verizon lost a net 4,000 prepaid subscribers last quarter, versus Wall Street’s estimate of a 6,400 gain.

The U.S. wireless industry has been aggressive in terms of promotional efforts to boost sales in recent months, with deals tied to the new Apple (AAPL) iPhone lineup offering as much as a $1,000 subsidy for some customers. That didn’t hurt Verizon’s profit margins in the July to September period, but did perhaps weigh slightly on average revenue per user, or ARPU.

That metric came in at $43.07, versus the $43.18 consensus. AT&T and T-Mobile could likewise see strong account growth…