Boring is good when you're the largest wireless carrier in the country.
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Buoyed by soft promotions around the latest iPhone, Verizon Communications Inc. boosted revenue and its subscriber rolls in the third quarter, a sign the carrier's return to unlimited data plans earlier this year has staunched customer defections.
Verizon added 603,000 monthly postpaid connections in the quarter, nearly double what Wall Street expected. The company had 115.3 million total wireless retail connections, up from 113.7 million the same quarter last year and 114.5 million in the second quarter.
Verizon shares rose 2.2% to $49.73 in midday trading Thursday but are down about 7% on the year.
After losing customers during the first three months of the year, Verizon in February brought back unlimited wireless plans for the first time since 2011. The unlimited plans allow customers pay a flat rate for nearly unlimited monthly internet usage on their smartphones.
The move exacerbated revenue declines in Verizon's wireless unit, as many customers on older, more expensive plans quickly switched over to the cheaper unlimited option. That trend is slowing as customers on plans with data caps are now starting to pay up for unlimited data, the company said. While revenue from the wireless business, its largest unit, fell 2.4% to $21.58 billion, the company said the declines were bottoming out.
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"We knew initially we would see optimizers who had the opportunity to move to unlimited and save money," said Verizon finance chief Matt Ellis on a call Thursday with analysts. Wireless-service revenue increased sequentially for the first time in three years.
Verizon's subscriber metrics also benefited from weaker promotions around Apple Inc.'s latest iPhone. But heavier competition could arrive during the last three months of the year, analysts warned, as the flagship iPhone X goes on sale in November, just in time for the holiday season.
Verizon said wearable devices, such as watches, made up a significant portion of its 238,000 connected device additions in the quarter -- an indication that Apple's new LTE connected smartwatch is off to a decent start.
Revenue at the wireline segment that includes its Fios internet and television service increased 1.1% to $7.66 billion, boosted by its acquisition of XO Communications, which owned fiber-optic networks.
Verizon cited ongoing consumer shifts to over-the-top video options and away from traditional television as the reason for losing 18,000 Fios video customers in the quarter. That is more that the loss of 15,000 in the second quarter and 13,000 in the first quarter. It gained 36,000 in the third quarter last year. It ended the quarter with 4.6 million Fios video customers.
In all, Verizon profit was the same as the third quarter last year, with net income of $3.62 billion, or 89 cents a share. Revenue rose 2.5% to $31.72 billion. Still, excluding acquisitions and divestitures, adjusted revenue fell 2.3%.
Verizon expects capital spending for 2017 to be at the lower end of its $16.8 billion to $17.5 billion range.
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(END) Dow Jones Newswires
October 19, 2017 12:34 ET (16:34 GMT)