Verizon's Revenue Slips Amid Pandemic -- WSJ
25 Juillet 2020 - 09:02AM
Dow Jones News
By Drew FitzGerald
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (July 25, 2020).
Verizon Communications Inc. continued to add cellphone customers
as the coronavirus raged in the spring, though quarterly revenue
declined in its core wireless business and its online advertising
unit.
The largest U.S. cellphone carrier by subscribers on Friday
reported a net gain of 173,000 postpaid phone connections during
the three months through June. The figure included past-due
accounts that were still in service in the quarter under a
commitment by providers to grant leeway during the pandemic.
Verizon counted 119.9 million active wireless connections, which
include tablets, smartwatches and other cellular devices, at the
end of June.
U.S. wireless and broadband-service providers agreed earlier
this year to waive late-payment and overage fees and maintain
service for customers unable to pay their bills during a health
crisis that had already forced tens of millions of Americans to
work from home.
The federal Keep Americans Connected pledge expired June 30,
putting hundreds of thousands of users at risk of losing service.
But Verizon said it had enrolled many customers in extended
repayment plans in July to keep them on its rolls.
"We believe the vast majority of these accounts can be cured
over time," Chief Financial Officer Matt Ellis said during a
conference call with analysts, though he warned that expectation
hinges on the economic environment.
About 1.5 million personal and small-business accounts took
advantage of the extra grace period for late payments in the second
quarter, Mr. Ellis said, adding that most of them made some payment
and roughly a third were current by the end of June.
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 their service remained active
during the pledge.
Verizon, which temporarily closed its retail stores as the
coronavirus spread across the U.S., said its device-upgrade rate
fell to 3.7% from 4.3% a year earlier as weak retail traffic
crimped smartphone sales. The company said more than 60% of its
locations were open by the end of June and it expects to be almost
fully open by the end of this month.
Overall, the company's total revenue for the second quarter
slipped 5.1% from a year earlier to $30.4 billion. Wireless-service
revenue fell 1.7%, and the company forecast it would be flat to
down 1% in the current quarter. Revenue in the company's media
business, which includes its Yahoo and AOL properties, fell 25% to
$1.4 billion.
Net income attributable to Verizon rose to $4.7 billion, or
$1.13 a share, from a year-earlier $3.9 billion, or 95 cents a
share. Fewer phone sales helped boost Verizon's bottom line because
devices sold to customers offer carriers little to no profit. Total
equipment costs dropped 18%.
The Covid-19 pandemic upended companies' profit 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 projection for annual adjusted per-share profit 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 boost results during the pandemic, which
has triggered a work-from-home wave. The company in April agreed to
buy Blue Jeans Network Inc., a videoconferencing service that
targets corporate clients.
The company's consumer unit reported a net gain of 10,000 Fios
broadband subscribers despite a temporary pause in some in-home
installations. Fios pay-TV customers dropped by 81,000 as more
Americans cut the cable cord in favor of cheaper streaming video
options.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
July 25, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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