Verizon revenue drops as subscriber additions disappoint

Thu Oct 20, 2016 1:30pm EDT
 
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By Aishwarya Venugopal and Malathi Nayak

(Reuters) - Verizon Communications Inc  added fewer than expected wireless subscribers in the third quarter due to intense competition, and indicated it may renegotiate a deal to buy Yahoo Inc after a breach of Yahoo user email accounts.

As its bread-and-butter wireless operations struggle in a saturated phone market, Verizon had said in July it would buy Yahoo's core business for $4.83 billion to drive growth in advertising and media.

The company said on Thursday total operating revenue in the quarter fell 6.7 percent to $30.94 billion, from $33.16 billion. Analysts had expected revenue of $31.14 billion, according to Thomson Reuters I/B/E/S.

Shares of Verizon, the No.1 U.S. wireless company, slipped 2.7 percent to $49.04 in afternoon trading. The stock has gained more than 6 percent this year so far.

Verizon added a net 442,000 retail postpaid subscribers, who pay their bills on a monthly basis. This was significantly below analysts' estimated 766,300, according to market research firm FactSet StreetAccount.

Subscriber growth in the third quarter was partly hurt by a recent recall of the Samsung Note 7 smartphone due to the risk of overheating and catching fire, and a backlog in orders for Apple's new iPhone 7, Verizon executives said.

Smaller rivals, such as T-Mobile US Inc and Sprint Corp, have rolled out aggressive promotions to win over Verizon's subscriber base.

  Continued...

 
The Verizon logo is seen on the side of a truck in New York City, U.S., October 13, 2016.  REUTERS/Brendan McDermid