Verizon(VZ.US) Q3 revenue misses expectations due to delayed upgrades from U.S. users

Verizon(VZ.US) reported Q3 revenue of $33.3 billion, flat YoY, slightly below market expectations of $34.3 billion; adjusted EPS of $1.19, topping market expectations of $1.18. Net profit fell to $3.4 billion from $4.9 billion a year ago, mainly due to $1.7 billion in severance costs from voluntary separation plans and other layoffs.

Verizon reported a 10% decline in phone upgrades, which led to a ~9% decline in wireless device sales, due to high interest rates forcing customers to cut back on spending.

Verizon added 239,000 net monthly paid wireless phone users in Q3, topping expectations of 218,100. In contrast, it added 148,000 users in Q2.

Verizon's myPlan has been gaining popularity, helping the company maintain its resilience in the competitive US telecom market. The myPlan is a customizable service that offers streaming services such as Disney+, Hulu and Max, but requires additional fees.

As the US wireless market nears saturation, Verizon and its competitors have been seeking to expand their high-speed broadband internet businesses to capitalize on customers' growing data usage. Last month, the company agreed to buy fiber internet provider Frontier Communications(FYBR.US) for $20 billion.

Verizon added 389,000 broadband network users in Q3, bringing its total broadband users over 11.9 million, compared with 434,000 added in the same period a year ago.

The company added 363,000 fixed wireless users, bringing its total to nearly 4.2 million, a year ahead of its target of 4-5 million users.