Verizon's Q2 Postpaid Phone Customer Losses Exceed Expectations; Raises Full-Year Earnings Forecast

Verizon Communications raised its earnings forecast for the year despite losing 9,000 postpaid phone customers in Q3, missing analyst expectations of adding 13,000 connections. This marks the second consecutive quarter of postpaid phone losses, compared to adding 26,000 in the same period last year. Despite this, Verizon's full-year forecast has improved.

Verizon Communications Inc. (VZ) reported mixed results for the third quarter, but the company managed to raise its full-year earnings forecast, despite a net loss of 9,000 postpaid phone customers. This marks the second consecutive quarter of postpaid phone losses, a significant drop from the 26,000 additions reported in the same period last year [1].

Verizon's Chief Financial Officer Tony Skiadas attributed the net loss to a disciplined approach to subscriber growth, emphasizing the need for financial sense in its subscriber acquisition strategy. Despite the setback, Verizon's prepaid operations added a net of 50,000 wireless retail subscribers, compared to a net loss of 12,000 in the same period a year ago [1].

The company's earnings per share (EPS) for the quarter came in at $1.18, surpassing analyst expectations of $1.17 and $1.19, respectively. Verizon also reported total operating revenue of $34.5 billion, which exceeded analyst projections by $790 million [2].

Verizon's stock has shown resilience, with a 5.2% increase in afternoon trading following the earnings report. This performance comes as the company raised its expectations for free cash flow for the full year to $19.5 billion to $20.5 billion, up from its previous estimate of $17.5 billion to $18.5 billion [1].

Analysts remain optimistic about Verizon's prospects, with a one-year average target price of $47.81, suggesting a potential upside of 17.06% from the current trading price of $40.84. The consensus recommendation from 28 brokerage firms is an "Outperform" status, indicating a favorable outlook for the stock [2].

Verizon's improved financial outlook is driven by strong cash flow from operations and the positive impact of tax reform, as highlighted by Chief Executive Hans Vestberg during the earnings call [1].

References:
[1] https://www.morningstar.com/news/marketwatch/20250721104/verizons-stock-is-having-its-best-day-in-over-a-year-heres-the-big-highlight-from-earnings
[2] https://www.gurufocus.com/news/2989807/verizon-vz-surpasses-q3-earnings-expectations