Oct 23 (Reuters) - Verizon Communications Inc on Tuesday beat Wall Street estimates for profit and net new phone subscribers, helped by the popularity of its promotional offers subsidizing Apple Inc's latest iPhones.
The largest U.S. wireless carrier knocked up to $750 off the price of some of Apple's new phones, launched in September, as it looks to gain more share in a saturated market.
|VERIZON COMMUNICATIONS INC.
Verizon shares rose slightly to $55.20 in pre-market trading.
The company said it added a net 295,000 phone subscribers who pay a monthly bill during the third quarter, beating the estimate of 161,000 provided by research firm FactSet.
Revenue from Oath, Verizon's digital media subsidiary that owns websites AOL and Yahoo, was $1.8 billion during the third quarter, down from $2 billion a year before. Verizon said it now does not expect Oath to reach its previous target of $10 billion in revenue by 2020.
That sparked talk that Verizon may dispose of the unit.
"I would expect the next move will be that the business is jettisoned entirely,” said Jonathan Chaplin, an analyst with New Street Research.
Net income attributable to the company rose to $4.92 billion, or $1.19 per share, in the quarter ended Sept. 30, up from $3.62 billion, or 89 cents per share, a year earlier.
Excluding some items, Verizon earned $1.22 per share, beating analysts' average estimate of $1.19 per share, according to Refinitiv data.
Verizon, which has been focused on cost-cutting, said it is on track to reach $10 billion in cumulative cash savings by 2021.
Verizon launched home 5G internet service on Oct. 1 in parts of Houston, Indianapolis, Los Angeles and Sacramento. The next-generation wireless network is expected to bring faster data speeds, which Verizon hopes will help it compete with competitors like cable company Comcast Corp.
It has, so far, concentrated on investing in its wireless network rather than deal-making. Its next-largest competitor AT&T Inc bought Time Warner in an $85 billion deal that closed in June, betting it could attract more customers with media content.
Verizon said it lost 63,000 Fios video subscribers during the quarter, more than the 18,000 it lost last year, as viewers continue to favor cheaper TV services delivered over the internet, over paying for pricier cable packages.
It added 54,000 Fios internet customers, fewer than the 66,000 Verizon added a year earlier.
Total operating revenue rose 2.8 percent to $32.61 billion during the quarter, beating analysts' average estimate of $32.51 billion, according to Refinitiv data. (Reporting by Akanksha Rana in Bengaluru and Sheila Dang in New York Editing by Supriya Kurane and Bill Rigby)