Published: Fri, April 21, 2017
Finance | By Laverne Griffith

For the first time ever, Verizon sheds subs: 300000 punters walk out

For the first time ever, Verizon sheds subs: 300000 punters walk out

Both the wireless and wireline businesses are under pressure, underscoring why the company is openly interested in merger and acquisition possibilities as avenues for growth. On a per-share basis, Visa earned 18 cents a share versus 71 cents a share a year ago.

The company has also pursued revenue streams outside its core wireless business.

In a call with analysts, Matt Ellis, the Chief Financial Officer of the company said - "We're confident in executing our strategy organically, but if there's the right opportunity out there to accelerate the strategy inorganically in a way that adds shareholder value, we're always looking at those opportunities". As a result of the contributions, Verizon's mandatory pension funding through 2020 is expected to be minimal, which will benefit future cash flows and improve the funded status of qualified pension plans.

"Though they lost more than 300,000 customers in the quarter it would have been much worse had they not offered unlimited halfway through the quarter", said Kevin Roe, an analyst at Roe Equity Research LLC.

Total operating revenue fell to $29.81 billion from $32.17 billion a year earlier.

Verizon's retail postpaid connections base grew 1.2 percent year over year to 108.5 million, and retail prepaid connections grew 0.5 percent to 5.4 million.

Verizon's quarterly subscriber loss was the first of its so-called postpaid wireless customers in the company's history.

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Visa processed $1.73 trillion on its credit and debit card network in the quarter, up 37 percent from a year earlier, but that increase includes the processing business of Visa Europe as well.

At the end of first-quarter 2017, approximately 72 percent of postpaid phone customers were on a non-subsidized service pricing plan.

As previously announced, Verizon plans to launch 11 pre-commercial 5G fixed wireless pilots during second-quarter 2017.

Verizon added 35,000 FiOS internet connections but lost a net 13,000 FiOS Video connections during the quarter.

Verizon has been struggling to fend off smaller rivals T-Mobile US Inc TMUS.O and Sprint Corp S.N in a maturing market for USA wireless service, and in February offered an unlimited data plan for the first time in more than five years.

This year, the wireless major hopes to see improvements in its wireless service revenue with total revenue "fairly consistent" with 2016. In premarket trading on Thursday, the company's shares sunk over 2%, while the stocks have dropped by over 8% from the starting of this year. Verizon's 2017 effective tax rate should fall within a range of 34 to 36 percent, the company said, which would exclude any impacts from the Trump administration's potential tax reform. "The coming quarters will probably look a lot different than the past quarters".

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