Verizon’s Earnings – Good News And Bad News – 5G Vs. Cord Cutting
Verizon Communications Inc announced their financial results today, describing the second quarter of this year as a “record Q.2 performance.” However, Verizon showed a continued decline in the traditional Fios TV subscribers that they have relied on for past growth. Fios TV ended the first half of the year down 270,000 subs from the previous half-year. In the second quarter Verizon lost 62,000 subs versus 81,000 subs lost last year in the same quarter.
A recent national research study I conducted among adults in the U.S. indicated that 13% of all those 18 and older in the U.S. said they were “extremely likely” to cancel their pay TV subscription. Last year the number was only 8%. The intent to cut the pay TV cord is highest among people in the U.S. who are 18 to 34 years old. This year 23% of them said they were “extremely likely” to cut the cord, while last year it was 17%.
The good news for Verizon centers around their mobile phone business. They have been very active in building out their 5G system which will enable faster and better high-bandwidth content and services.
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Verizon has also reported strong results regarding their Internet access service provided through Fios broadband. They gained well over 400,000 subscribers to their high-speed internet service, up from the previous year.
Verizon’s total operating revenue rose 10.9% to $33.8 billion in the second quarter, compared with estimates of $32.74 billion, according to IBES data from Refinitiv.
The Verizon CFO, Matt Ellis, touted their quarterly record and expressed enthusiasm for the confidence of his company, “The strength in our core business is driving higher revenues and strong demand for our products and services.” He added in a statement, “We delivered strong operational and financial performance, giving us positive momentum as we end the first quarter. High quality, sustainable wireless service revenue growth, a recovery in wireless equipment revenues, strong Fios momentum and excellent Verizon Media trends led the way.”
Clearly Verizon has no interest in focusing on the expensive mistake they made buying AOL and Yahoo, which they are now selling for half of what they originally paid. It appears again that the power of Verizon will be in providing the essential infrastructure for businesses and consumers required today, with increasing demand in the future. Verizon’s current content strategy is focused on distribution partnerships with numerous TV and film outlets.