(Reuters) - Verizon Communications Inc on Thursday beat second-quarter profit estimates as the U.S. mobile carrier added more monthly phone subscribers than expected and stepped up efforts to deploy the next-generation 5G network nationwide.
Shares of the Dow component were up 1.3% at $56.00 at midday after the company said it added a net 245,000 phone subscribers during the quarter. Analysts were expecting it to add 163,000 subscribers, according to research firm FactSet.
Analysts pay attention to postpaid customers, or those with a recurring bill, because they are more valuable to carriers and tend to remain with the company longer than prepaid customers.
“Verizon made history this quarter by becoming the first carrier in the world to launch 5G mobility,” said Verizon Chairman and CEO Hans Vestberg. “We are focused on optimizing our next-generation networks and enhancing the customer experience while we head into the second half of the year with great momentum.”
The company’s progress with 5G technology, he added, was going “extremely faster” than it had with 4G.
Verizon has focused on deploying 5G nationwide, seeking to expand to more than 30 U.S. cities in 2019. Earlier this week, Verizon started servicing parts of Washington, Atlanta, Detroit and Indianapolis with 5G.
But while Verizon is leading the charge to test its 5G services, industry analysts say the higher-speed networks are unlikely to be widely available until the middle of the next decade.
The earnings announcement came about a week after the U.S. Justice Department approved a merger between T-Mobile USA and Sprint Corp. As part of that approval, T-Mobile agreed to divest Sprint’s prepaid businesses including Boost Mobile and other assets to Dish Network Corp to build out a viable fourth carrier in a couple of years.
Verizon, AT&T, T-Mobile and Sprint control more than 98% of the U.S. wireless market and have wireless service revenues of more than $160 billion. T-Mobile and Sprint together have more than 135 million customers, while Verizon and AT&T control two-thirds of the total U.S. wireless market.
Net income attributable to Verizon fell to $3.94 billion or 95 cents per share in the quarter ended June 30, from $4.12 billion or $1 per share, a year earlier.
On an adjusted basis, Verizon earned $1.23 per share, beating analysts’ average estimate of $1.20 per share, according to IBES data from Refinitiv.
Total operating revenue fell 0.4% to $32.1 billion, missing expectations of $32.41 billion. Revenue from Verizon’s media unit alone was $1.8 billion, down 2.9% from a year earlier.
Reporting by Angela Moon in New York and Arjun Panchadar in Bengaluru; Editing by Will Dunham and Matthew Lewis