Verizon Communications Inc. added 640,000 new subscribers and met analysts' profit estimates, using tablet promotions to stay at No. 1 in an increasingly competitive U.S. wireless market.
First-quarter earnings excluding some items were $1.06 a share, the New York-based company said in a statement Thursday. That matched analysts' estimates compiled by Bloomberg. Revenue was $32.2 billion, compared with a projection of $32.5 billion. Six analysts surveyed by Bloomberg estimated that the company would add 488,000 monthly subscribers.
Verizon's reliance on tablet promotions underscores the challenges of attracting new mobile-phone users amid data giveaways and free music- and video-streaming offers from T-Mobile and iPhone-for-life leasing from Sprint. All three companies are also heavy TV advertisers, often directly engaging one another's claims about service and speeds.
At the same time, Verizon is facing a slowdown in Fios TV user growth, which has forced the company to change its strategy to provide internet TV, or IPTV, while pursuing new sources of revenue.
The telecom giant has been acquiring content and digital-video advertising assets to rapidly expand its mobile-streaming business, a strategy that has sparked its interest in buying Yahoo. The carrier is on the short list of bidders, which also includes private-equity firm TPG and YP Holdings, to acquire the struggling Web company, Bloomberg News has reported.
Refocusing on mobile, Verizon took a hard stance with its two largest labor unions this month, forcing a strike of about 39,000 workers from Massachusetts to Virginia that's now in its second week. Almost all the workers are employed by the carrier's landline business, which has seen annual declines in the number of lines served as well as job cuts. The labor standoff will put pressure on second-quarter earnings, Verizon said Thursday, without offering specifics.
Verizon lost 8,000 postpaid phone customers in the quarter. Analysts projected a loss of 77,000. New Fios internet customers totaled 98,000, compared with 133,000 a year earlier. The company also added 36,000 Fios TV subscribers in the quarter, compared with 90,000 a year earlier.
-- Bloomberg News