Verizon first-quarter results beat estimates

(Reuters) – Verizon Communications Inc (VZ.N) reported better-than-expected first-quarter results on Tuesday as the No. 1 U.S. wireless carrier lost fewer monthly phone subscribers than feared, and the company’s chief financial officer said it was continuing to explore a new video service.

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

Shares of the company rose 2.28 percent to $49.77 in morning trading.

Verizon lost 24,000 phone subscribers who pay a monthly bill, while analysts expected it to lose 69,000 subscribers, according to financial and data analytics firm FactSet.

Speaking on the post-earnings conference call, Verizon Chief Financial Officer Matthew Ellis said the company was not interested at this time in acquiring broadcast or cable networks, but continued to look at “over-the-top” options, or cheaper streaming video packages with fewer channels.

Verizon was a bidder for Twenty-First Century Fox Inc (FOXA.O) assets, which Walt Disney Co (DIS.N) is trying to buy for $52.4 billion.

The company expects to have an overall product offering for consumers in the three to five markets where it plans to launch home 5G broadband later this year, and will add more content to Oath, its subsidiary that owns Yahoo! and AOL, Ellis said.

That could include news, sports, finance or entertainment content, Ellis said in an interview.

Analysts questioned whether Verizon had its sights on traditional media similar to AT&T Inc (T.N), which is fighting in court against the U.S. Department of Justice to close its acquisition of Time Warner Inc (TWX.N), and while Ellis said the company would look at potential deals, it is not the main focus.

Verizon instead expects to add to its distribution rights for digital content, Ellis said.

Net income attributable to Verizon rose to $4.55 billion, or $1.11 per share, in the first quarter ended March 31 from $3.45 billion, or 85 cents per share, a year earlier.

On an adjusted basis, the company earned $1.17 per share. Total operating revenue rose to $31.77 billion from $29.81 billion a year earlier.

Analysts had expected adjusted earnings of $1.10 per share and revenue of $31.26 billion, according to Thomson Reuters I/B/E/S.

Verizon added 66,000 Fios internet customers during the quarter and lost 22,000 Fios video subscribers.

Verizon’s first-quarter 2018 earnings per share included approximately 21 cents due to tax reform and accounting changes for revenue recognition.

The company expects savings from tax reform will generate a net $3.5 billion to $4 billion benefit to cash flow from operations in 2018, resulting in a 55 to 65 cent increase in 2018 earnings per share.

Reporting by Shariq Khan in Bengaluru and Sheila Dang in New York; Editing by Anna Driver and Phil Berlowitz

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