Verizon Communications, whose deal to buy Yahoo's core assets has been cast into doubt by data breaches at the internet company, added fewer subscribers than expected in the latest quarter amid stiff competition from smaller rivals T-Mobile U.S. and Sprint.
Continue Reading Below
Verizon added a net 591,000 retail postpaid subscribers - those who pay their bills on a monthly basis - in the fourth-quarter, far fewer than the 726,00 analysts had expected, according to market research firm FactSet StreetAccount.
Shares of New York-based Verizon, which has said it wants to buy Yahoo's assets to drive growth in advertising and media, were down 2.7 percent at $51 in premarket trading.
Verizon's operating revenue fell for the third straight quarter, to $32.34 billion, from $34.25 billion in the same period of 2015.
Analysts on average were expecting revenue of $32.08 billion, according to Thomson Reuters I/B/E/S.
Talk that Verizon may demand for better terms from Yahoo intensified in December after the internet pioneer disclosed that a breach in 2013 had exposed data from more than 1 billion user accounts. Yahoo said in September another breach in 2014 had compromised the accounts of more than 500 million users.
Continue Reading Below
Taking into account the two breaches, Yahoo said on Monday that its deal with Verizon was expected to wrap up in the second quarter instead of the first quarter, putting to rest some investor concerns about the deal's future.
Verizon said on Tuesday it continued to work with Yahoo to assess the impact of data breaches.
Net income attributable to the No. 1 U.S. wireless carrier fell to $4.5 billion, or $1.10 per share, in the quarter ended Dec. 31 from $5.39 billion, or $1.32 per share, a year earlier.
Excluding items, the company earned 86 cents per share, missing the average estimate of 89 cents per share.
Churn, or customer defections, among those wireless retail customers who pay bills on a monthly basis, increased to 1.10 percent of total wireless subscribers, compared with the average analyst estimate of 1.05 percent, according to FactSet.
Up to Monday's close, Verizon's shares had risen 11.4 percent in the past 12 months.
(Reporting by Aishwarya Venugopal and Supantha Mukherjee in Bengaluru; Editing by Ted Kerr)