Verizon lifts annual forecasts, signs $1 billion fiber deal with Google
FILE PHOTO: A contract crew from Verizon installs 5G telecommunications equipment on a tower in Orem, Utah, U.S. December 3, 2019. Picture taken December 3, 2019. REUTERS/George Frey/File Photo
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July 24 : Verizon raised its annual adjusted profit forecast and said it had secured a more than $1 billion deal with Google to provide dark fiber connectivity for its data centers, sending the telecom operator’s shares up 3 per cent.
More agreements are expected by the year-end that could generate multiple billions of dollars in revenue over the next several years, Verizon CEO Dan Schulman said on a post earnings call.
The AI infrastructure buildout is opening a new avenue for telecom operators to monetize their fiber networks as hyperscalers seek high-capacity connectivity between data centers.
Verizon is in the midst of a strategic transition under new CEO Schulman, rolling out simplified mobile plans, a new loyalty program and bundled wireless-broadband offerings to improve customer additions after trailing rivals in subscriber growth.
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The company said on Friday it gained 184,000 monthly-bill paying wireless subscribers in the second quarter, surpassing estimates of 103,900 additions by analysts polled by FactSet.
In June, Verizon overhauled its wireless offerings with the launch of Simplicity, an unlimited wireless plan that replaces a more complex lineup with transparent pricing and includes access to the company’s fastest 5G network and mobile hotspot data.
The company now expects an annual adjusted profit of $4.99 to $5.04 per share, up from $4.95 to $4.99 previously.
Free cash flow is expected to grow between 9 per cent and 10 per cent this year, higher than its previous estimate of about 7 per cent or more.
Second-quarter revenue came in at $34.3 billion, below analysts’ estimate of $35.16 billion, according to data compiled by LSEG, as equipment revenue fell due to slower phone upgrade activity, with customers holding on to their devices for longer.
Adjusted profit of $1.30 per share, however, beat estimates of $1.27, helped by cost controls and reduced spending on device subsidies.
Source: Reuters
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