Verizon has raised its full-year outlook after reporting a return to growth at its consumer mobile business in Q2. Wireless service revenues rose 5.9 percent year-on-year in the second quarter to USD 16.9 billion, and Verizon now expects annual growth of 3.5-4.0 percent compared to a previous forecast of at least 3 percent.
The company also increased the EPS forecast for 2021, to USD 5.25-5.35 from a previous estimate of USD 5.05-5.15. In the second quarter, EPS increased to USD 1.40 from USD 1.13 a year ago, and was up 16 percent on an adjusted basis to USD 1.37.
Total revenues in Q2 rose 10.9 percent year-on-year to USD 33.8 billion and were up 5.3 percent from Q2 2019. The increase was the result of wireless revenue growth, strong Fios and Verizon Media results, and increased wireless equipment revenue, Verizon said. The company withdrew its previous forecast for service and other revenue growth this year, due to the pending sale of Verizon Media, which is expected to close before year-end.
Consumer revenues rose 11.2 percent to USD 23.5 billion in Q2, led by a recovery in mobile equipment sales and a 5.4 percent rise in wireless services. Segment EBITDA totaled USD 10.4 billion, an increase of 4.9 percent from second-quarter 2020.
Verizon returned to net growth of 350,000 consumer postpaid customers in Q2, and said wireless revenues also benefited from a shift towards premium and unlimited plans and higher sales of paid content and services. Customer growth included 197,000 phone net additions and 234,000 other connected devices, offset by a loss of 81,000 tablets. In total, a fifth of all consumer phone customers have a 5G device. In the fixed market, Fios reported a net gain of 92,000 internet customers while losing 62,000 video subscribers.
Business revenues increased 3.7 percent year-on-year to USD 7.8 billion, while EBITDA fell slightly to USD 1.9 billion from USD 2.0 billion a year ago. Wireless service revenue rose 8.0 percent, led by demand from SMB and global enterprise customers, and the operator added a net 178,000 postpaid business mobile customers in Q2.
Verizon Media contributed USD 2.1 billion in revenues, up 50 percent from a year ago thanks to the recovery in the advertising market following the initial wave of the pandemic.
Verizon spent USD 8.7 billion on capital equipment in the first half of 2021 and said the full-year budget should reach USD 17.5-18.5 billion. Spending to deploy the C-band spectrum will come in addition to this amount. Operating cash flow fell to USD 20.4 billion in H1 from USD 23.6 billion a year ago due to an increase in cash taxes and working capital requirements.
