Verizon adds 1.5 million new monthly users; revenue beats estimates
By Malathi Nayak and Kshitiz Goliya
(Reuters) - Verizon Communications Inc on Thursday reported higher-than-expected revenue for the fourth quarter as heavy promotions helped it counter aggressive offers and discounts from rivals and win new users.
Shares of the No. 1 U.S. wireless phone service provider, whose profit edged past analysts' estimates, rose 2.7 percent to $45.63 in morning trading.
Verizon added a net 1.5 million wireless retail postpaid, or monthly, subscriptions in the quarter, below 2 million a year earlier but above the analysts' average estimate of 1.42 million, according to market research firm FactSet StreetAccount.
The company, known for its high-quality network, withstood stiff competition from rivals in the saturated U.S. wireless market. Smaller rival Sprint Corp offered 50 percent off to encourage users to switch to its network, and T-Mobile US Inc launched a free video streaming plan.
For its part, Verizon rolled out holiday season offers such as a data giveaway on some plans, $100 discounts on certain phones and a $300 credit to trade in some models.
Customer defections, or churn, in Verizon's postpaid business fell to 0.96 percent from 1.14 percent a year earlier.
Average revenue per account, however, fell 6.6 percent to $148.30, below the analysts' forecast of $149.61, according to FactSet. Jefferies analyst Mike McCormack said Verizon must curb such declines in this measure this year.
Like its rivals, Verizon has switched from offering customers two-year contracts to monthly installment plans that have lower service fees and can weigh on revenue. Continued...