Verizon Earnings Growth Forecast To Slow on Declining Subscriber Gains

Revenue from wireless subscriptions likely rose at the slowest pace in two years

Verizon sign in front of a Verizon store

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Verizon (VZ), America’s second-largest telecommunications company by revenue and the largest by subscriber count, likely will report modest earnings growth for the first quarter as expansion of its postpaid and wireless business slows, with Verizon losing market share to rival T-Mobile (TMUS).

Key Takeaways

  • Verizon’s earnings growth likely will slow due to stagnant revenue and less-robust subscriber gains for its wireless services.
  • Revenue from wireless services, which accounts for almost half of Verizon's total, is forecast to grow just 3%, the slowest pace in two years.
  • Earnings per share (EPS) for Verizon are estimated at $1.18, up 7.8% from the year-ago quarter.

Verizon's operating revenue is projected at $33.6 billion, roughly unchanged from the same quarter last year, with revenue from wireless services forecast to be $15.7 billion. At 3%, revenue growth is projected to be the slowest since the first quarter of 2021 as subscriber gains stall.

Earnings per share (EPS) are forecast at $1.18, up 7.8% from the year-ago quarter, with net income likely rising 6.8% to $5.03 billion. Verizon will report its first-quarter earnings before markets open on Tuesday.

In recent quarters, Verizon has been losing market share to rival T-Mobile in the lucrative postpaid wireless business. Verizon is projected to report 120.86 million postpaid subscribers for the quarter ended March, up just 1.4% from the same period last year. Verizon added 217,000 postpaid subscribers in the previous quarter, while rival T-Mobile added 927,000 new subscribers because of its strong 5G network offerings.

On the other hand, Verizon’s swift rollout of its wideband spectrum and high-speed, fiber-optic broadband network could allow it to reach more customers and improve its growth prospects over the coming years.

The company is working to upgrade its services and cellular capacity across multiple U.S. cities, including Madison, Wisconsin; San Diego, Nashville, and Memphis. The improvements include deployment of 5G technology, construction of new cell sites, and raising the capacity on existing fiber-optic cables and cellular infrastructure.

Verizon Key Metrics
  Estimate for Q1 FY 2023 Q1 FY 2022 Q1 FY 2021
Wireless Services Revenue ($M) 15,676 14,643 13,600
Postpaid Subscribers (M) 120.86 119.22 116.79
Earnings per Share ($) $1.18 $1.09  $1.27

Verizon shares are down 5.5% so far this year, lagging rivals AT&T (T) and T-Mobile, which are down 4% and up 5%, respectively, over the same period. Verizon stock also has underperformed the broader S&P 500 Communication Services sector, which has risen 20% over the same period.

Verizon (VZ) Stock Performance vs. Peers (2023 YTD)


Article Sources
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  1. YCharts. "Financial Data."

  2. Forbes. "Will Verizon's Postpaid Woes Continue in Q1?"

  3. Droid Life. "Verizon Upgrades 5G in Another 6 Cities, Including San Francisco."

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