Verizon Revenue Falls Below Views

FeaturesDow Jones Newswires

Verizon Communications Inc. on Thursday reported revenue slid more than expected in the latest quarter as subscriber additions plunged amid a pricing war that continues to weigh on the wireless provider.

It was the second straight quarterly decline for the top line after six years of growth, and shares lost 2.6% premarket to $49.08.

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Chief Executive Lowell McAdam, in the earnings report, said the company was operating in "highly competitive markets."

Verizon, which has been chasing revenue growth through acquisitions, in July said it would buy Yahoo Inc.'s Web assets for $4.83 billion in cash, ending a drawn-out process for the beleaguered internet company. For New York-based Verizon, the deal adds another piece to the digital media and advertising empire it is trying to build.

For the September period, Verizon said it added 442,000 net retail postpaid wireless subscribers, a 66% drop from the prior-year period. Postpaid churn, or the rate at which customers canceled service, rose 11 basis points to 1.04% from a year ago.

Revenue slipped 6.7% to $30.94 billion, below estimates for $31.09 billion, according to Thomson Reuters.

In all, Verizon posted a profit of $3.6 billion, or 89 cents a share, down from $4 billion, or 99 cents a share, a year earlier.

Excluding certain items, adjusted earnings were $1.01 a share, just above analysts' expectations for 99 cents a share.

Verizon's Fios TV and high-speed internet business, which has been lagging, began to pick up. Verizon added a net 90,000 internet customers in the quarter. It gained 36,000 video customers.

Verizon has been shifting its wireless customers to noncontact plans that have a cheaper monthly service rate but require customers to pay full price for their device, usually in installments.

The percentage of phone activations on installment plans rose to 70% from 67% in the second quarter. Verizon said it expects that rate to remain consistent in the fourth quarter.

Verizon, which has been facing rising competition, has warned that earnings may plateau in 2016 as it works through changes it has made to keep its wireless plans in line with rivals. On Thursday, the company backed its guidance for 2016 earnings�excluding a 7-cent per-share dent from the work stoppage during a union strike�to remain flat with 2015.

Yahoo on Tuesday posted an increase in third-quarter profit and said usage of its email product has increased slightly since disclosing a massive data breach that was announced last month, rare bits of good news as it clings to the deal to sell itself to Verizon.

Write to Anne Steele at