Verizon Communications reported better-than-expected earnings in its first quarter as the country's largest wireless carrier added more subscribers.
The company also defended its new cheaper cable packages that let customers pick and choose groups of channels. The new offerings have drawn complaints from sports cable channel ESPN.
Continue Reading Below
Verizon said it added 565,000 Verizon Wireless subscribers in the quarter, up 4.8 percent from the same quarter a year ago.
Verizon, which also provides Internet and cable service, said it added 133,000 FiOS Internet customers, up 36 percent from a year ago. It added 90,000 FiOS cable customers, up 58 percent from a year ago.
Last week, Verizon said it would let customers pick groups of channels they want to pay for instead of getting hundreds of channels. The plan starts at $55 a month for a basic tier of 35 channels plus two themed channel packs, such as sports or lifestyle channels.
ESPN, which is owned by The Walt Disney Co., objected to the plans saying that the new packages violated its contract. Francis Shammo, Verizon's chief financial officer, said in a conference call Tuesday that the new packages are allowed "under our existing contracts."
"Most people only, on average, watch 17 channels," said Shammo. "So this is a way to give consumers what they want."
Verizon reported first-quarter net income of $4.22 billion, or $1.02 per share. The results surpassed Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of 95 cents per share.
Revenue rose 4 percent to $31.98 billion in the period, missing Street forecasts. Eleven analysts surveyed by Zacks expected $32.28 billion.
Shares of New York-based Verizon Communications Inc. fell 77 cents, or 1.5 percent, to $48.61 in morning trading Tuesday.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on VZ at http://www.zacks.com/ap/VZ
Keywords: Verizon Communications, Earnings Report, Priority Earnings