Key Takeaways:
Verizon Communications gained 184,000 net postpaid phone connections in the second quarter, beating Wall Street expectations.
Some analysts remain cautious on Verizon's strategy, warning that cost-cutting alone may not be enough to reignite growth, according to Koyfin data. Fifteen of 26 analysts covering the stock rate it a Hold, with the remaining 11 rating it a Buy and none recommending a Sell.
Revenue ticked down from a year earlier while profit fell on costs tied to a joint venture. The company had been expected to post revenue of about $35.11 billion, a 2% increase, with earnings per share of $1.27, according to Fiscal.ai data. Verizon trades at 8.8 times forward earnings, below AT&T's 9.5 times and T-Mobile's 13.7 times.
The results come as Verizon faces pressure from SpaceX's Starlink expansion into mobile services and aggressive fixed wireless competition. The company is cutting about 3,000 positions at corporate-owned retail stores by transitioning 274 locations to independent ownership. Verizon shares have gained 8.7% year to date, with the consensus price target of $51.12 implying about 16.7% upside from the last close near $44.29.
The subscriber beat signals that Verizon's network investments are holding up against competitive pressure, but the revenue decline and joint-venture costs raise questions about near-term profitability. Investors will watch the company's earnings call at 8:30 AM ET for guidance on cost-cutting progress and competitive positioning.
This article is for informational purposes only and does not constitute investment advice.
