Verizon Shares Jump on Strong Profit and Subscriber Forecast

Verizon Reports Strong Subscriber Growth and Upbeat Forecast

Verizon has projected its annual profit and free cash flow to surpass market expectations. This announcement follows the company reporting its highest quarterly wireless subscriber additions in six years, driven by aggressive holiday promotions and a new share repurchase program.

Market Overview

In the fourth quarter, Verizon added 616,000 monthly bill-paying wireless subscribers, significantly exceeding analyst expectations of 417,250. The growth is attributed to successful promotional campaigns during the peak holiday season. The company is now focusing its strategy on combining wireless and broadband services, strengthened by its recent acquisition of Frontier's fiber assets, which expands its network footprint.

Economic and Market Impact

The positive forecast prompted a 9% jump in Verizon's share price. The company also unveiled a share repurchase program of up to $25 billion. For the upcoming year, Verizon expects an adjusted profit between $4.90 and $4.95 per share, above the consensus estimate of $4.76. Furthermore, annual free cash flow is projected to be at least $21.5 billion, surpassing expectations of $20.96 billion.

Summary

Verizon's optimistic outlook is underpinned by strong subscriber momentum and strategic expansion of its fiber network. The company is positioned for continued growth, aiming for 750,000 to 1 million new retail postpaid phone subscribers in the year ahead, a substantial increase from the previous year's performance.

FAQ

Q: Why did Verizon's stock price increase?
A: The stock rose due to a strong annual profit forecast, record subscriber growth, and the announcement of a new $25 billion share repurchase program.

Q: How many subscribers did Verizon add in the fourth quarter?
A: Verizon added 616,000 monthly bill-paying wireless phone subscribers, marking its highest quarterly additions in six years.

Source: Investing.com