Verizon reported a small increase in second-quarter net earnings, despite lower revenues, and said it still expects roughly flat earnings in the full year. Sales at the US operator were down 5.1 percent to USD 30.4 billion in Q2, hurt by lower handset sales due to store closures during the coronavirus outbreak as well as reduced usage and roaming by customers. The company said wireless service revenues fell 2.7 percent year-on-year to USD 13.1 billion and forecast a figure flat to 1 percent lower in Q3.
Net earnings rose to USD 1.13 per share from USD 0.95 a year ago, helped by a one-time tax benefit from an internal reorganisation. Adjusted earnings fell to USD 1.18 from USD 1.23 in Q2 2019. Verizon estimates the Covid-19 pandemic had an impact of 14 cents per share on both reported and adjusted EPS. In addition to the impact on wireless, Verizon Media suffered from a 24.5 percent fall in revenue to USD 1.4 billion, amid reduced advertising during the pandemic.
FY outlook reiterated
Verizon maintained its outlook for adjusted EPS over the full year to range from a drop of 2 percent to growth of 2 percent. Capital spending is estimated at USD 17.5-18.5 billion in 2020, after USD 9.9 billion invested in H1.
Operating cash flow reached USD 23.6 billion in the first half, an increase of USD 7.7 billion from the year-earlier period due mainly to the timing of tax payments and one-time items like severance costs. The company said it's achieved USD 7.2 billion of its targeted USD 10 billion in cost savings by 2021, and the crisis has prompted it to look after further opportunities for long-term savings.
Mobile customer growth positive
Customer growth was modest, but positive in Q2. The company added a net 352,000 retail postpaid subscribers, including 173,000 phones and 287,000 smartphones. Consumer growth was 72,000 new postpaid subscribers, and the business segment added 280,000. In the fixed market, the operator gained just 10,000 Fios broadband customers, as installations were limited by movement restrictions, and lost another 81,000 Fios Video subscribers.
Total consumer revenues fell 4.0 percent to USD 21.1 billion, and segment EBITDA declined 3.0 percent to USD 9.9 billion. Business revenues were down 3.7 percent to USD 7.5 billion, and EBITDA fell 7.4 percent to USD 2.0 billion.
