Verizon Revenue Drops as Coronavirus Slows Phone Shopping

By Drew FitzGerald

Verizon Communications Inc. continued to add cellphone customers during the pandemic, though quarterly revenue declined in its core wireless business and its online advertising unit.

The largest U.S. cellphone carrier by subscribers reported a net gain of 173,000 postpaid phone connections during the three months that ended in June. That figure included past-due accounts that were still in service under the federal Keep Americans Connected pledge.

U.S. wireless and broadband providers agreed in April to waive late-payment and overage fees and keep service active for customers unable to pay their bills during a pandemic that had already forced tens of millions of Americans to work from home. The program ended in June, putting hundreds of thousands of customers at risk of losing service.

Verizon's latest report only covered the second quarter, when the pledge was still active. Rival AT&T Inc. on Thursday reported a net loss of 151,000 postpaid phone subscribers, a figure that counted 338,000 past-due subscribers as disconnections, though they maintained service during the pledge.

Verizon, which temporarily closed its retail stores, said about 60% of its locations were open by the end of the second quarter.

Overall, the company's total revenue slipped 5.1% to $30.4 billion. Revenue in the company's media business, which includes its Yahoo and AOL properties, declined 25% in the quarter to $1.4 billion.

Net income attributable to Verizon reached $4.7 billion compared with $3.9 billion a year earlier. The recent result included a net pretax loss of $102 million tied to early debt redemption and a $153 million accounting charge related to the company's pension liabilities.

The Covid-19 pandemic upended companies' earnings projections this spring and forced many to set aside more cash for unexpected expenses. Verizon earlier this year pulled its revenue guidance and lowered its annual adjusted per-share profit projection to a range between 2% growth and a 2% decline. The company on Friday reiterated that prediction.

Executives have also said the essential nature of cellphone and broadband service could benefit earnings. The company in April agreed to buy Blue Jeans Network Inc., a videoconferencing service that targets corporate clients, as the pandemic triggered a work-from-home wave.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

(END) Dow Jones Newswires

July 24, 2020 08:37 ET (12:37 GMT)

Verizon Communications (NYSE:VZ)
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