Verizon Communications Inc. (NYSE: VZ) reported second-quarter 2020 results before markets opened Friday. The telecom giant posted adjusted diluted earnings per share (EPS) of $1.18 on revenues of $30.45 billion. In the same period a year ago, the company reported EPS of $1.23 on revenues of $32.07 billion. Analysts were looking for EPS of $1.15 and revenues of $29.93 billion.
The company added 352,000 net postpaid customers in the quarter, and the postpaid phone churn rate dropped sequentially from 0.76% to 0.58%. Retail postpaid phone additions dropped sequentially by 29% from 244,000 to 173,000. For the first half of the year, retail postpaid additions are down nearly 48% from 201,000 to 105,000.
Verizon estimated that the COVID-19 pandemic reduced adjusted EPS by about 14 cents, as a result of lower wireless service revenues and lower advertising and search revenue in the media division.
The stay-at-home orders stemming from the coronavirus outbreak limited customer traffic to Verizon’s retail outlets and were singled out as the primary reason for the 5.1% year-over-year decline in revenues.
Verizon’s total debt fell by $4.9 billion in the second quarter, and net debt (non-GAAP) decreased by $5.7 billion. The company’s unsecured debt balance totaled $102.2 billion, and its net unsecured debt (non-GAAP) totaled $94.4 billion.
The company’s media division posted revenue of $1.4 billion, down 24.5% year over year due to COVID-19-related effects.
Verizon reaffirmed its existing guidance for adjusted EPS in a range of −2% to +2% and full-year capital spending in a range of $17.5 billion to $18.5 billion.
Consensus estimates for the third quarter call for EPS of $1.21 and revenue of $31.6 billion. For the full year, analysts expect EPS of $4.75 and revenue totaling $127.7 billion.
Shares traded up about 2.7% at $57.42 early Friday. The stock’s 52-week range is $48.84 to $62.22, and the consensus 12-month price target is $60.70. Verizon’s dividend yield is 4.40% on an annual payment of $2.46 per share.
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