Verizon’s wireless metrics beat expectations in Q2

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Verizon reported solid second quarter results in its wireless business. (Verizon)

Verizon’s wireless business is doing better than most Wall Street analysts expected it to. Specifically, the company reported customer gains and financials better than most predictions.

Verizon in the second quarter said it gained 531,000 new retail postpaid net customer additions, a figure that comprised 199,000 net phone customer additions, 37,000 tablet customer losses, and 369,000 other connected devices additions, primarily wearables. The company said that its postpaid smartphone net additions for the quarter were 398,000.

Those figures were beyond what most Wall Street analysts had expected. For example, the analysts at Oppenheimer said that Verizon’s postpaid phone net customer additions of 199,000 beat the firm’s 150,000 expectations. The analysts at Deutsche Bank Research had expected Verizon to only report 83,000 postpaid phone additions.

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But more importantly, Verizon also reported growth in its wireless service revenue during the period, the first time that has happened since 2014. Verizon said its services revenues were driven by “customer step-ups to higher access plans and increases in the average connections per account.”

And the analysts at MoffettNathanson said that Verizon’s average revenue per user posted positive sequential growth for the first time in years.

“Verizon's better-than-expected 2Q results re-affirm our bullish stance on US Wireless, and more importantly, on the stock as the top beneficiary of these tailwinds,” wrote the analysts at Deutsche Bank Research, in a note to investors following the release of Verizon’s earnings.

However, some analysts sounded a note of caution: “Verizon has benefitted from the he current lull in wireless competition, but we suspect that it won’t last long. Competition from cable is rising, with Charter entering the fray late in the quarter; we suspect that by the end of the year it will be clear that the cable companies will be taking ~2MM net adds annually,” wrote the analysts at New Street Research. “In addition, TMUS and Sprint have been relatively benign competitors as they make their pitch to regulators; we suspect that regardless of whether or not the transaction clears regulators, competition will rise.”

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