Verizon Communications
was rising Tuesday after the telecommunications company posted a higher-than-expected profit and subscriber gains amid a tough telecom environment.
The New York-based wireless carrier reported profit of $1.22 a share in the third quarter. That beat the $1.18 a share consensus call among analysts tracked by
FactSet.
Revenue of $33.3 billion declined by 2.6% from a year ago but matched analysts’ expectations.
Telecom companies are battling for customers, so growth in
Verizon
‘s subscriber base was a key metric to watch. Verizon reported a net gain of 100,000 for postpaid phone subscribers in the third quarter. Analysts looked for Verizon to report a gain of 63,600 subscribers.
AT&T
last week reported a net gain of 468,000 of mobility postpaid phone subscribers for the quarter ended in September.
Verizon also raised its forecast for free cash flow to above $18 billion for 2023, beating expectations of $17.5 billion and a $1 billion increase from previously issued guidance.
Verizon’s stock shot 3.6% higher to $32.53 in premarket trading Tuesday.
The past quarter, Verizon introduced a new unlimited plan called Unlimited Ultimate, its priciest option at $100 a month for a single line without AutoPay Discount. It also raised prices on some existing wireless plans at the end of August. Verizon’s management has generally been reluctant to surrender ground on pricing. That helps the carrier to maintain its profit margins, though it has the potential to hurt the company’s subscriber growth.
The stock has a dividend yield of 8.3%, according to Morningstar. That means investors receive $8.30 in dividends each year for every $100 invested in the company’s stock. AT&T pays 7.4%.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com.
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