Verizon’s first-quarter 2019 results were mostly a mixed bag in the wireless division, with the operator reporting 61,000 retail postpaid net additions and a slight uptick in churn.
“Verizon began 2019 by extending our leadership position in 4G, driving innovation in 5G and expanding our high-valued customer relationships,” said Chairman and CEO Hans Vestberg in a prepared statement. “2019 is shaping up to be an exciting year for Verizon. We are leading the world in the development of new technologies with the launch of our 5G Ultra Wideband network.”
The company reported that its first-quarter 2019 capital expenditures totaled $4.3 billion, and its spending continues to support the launch and continued build-out of its 5G Ultra Wideband network. It’s also supporting the growth in data and video traffic on the company's 4G LTE network, the deployment of fiber in markets outside its wireline footprint and the upgrade to the Verizon Intelligent Edge Network.
CFO Matt Ellis said Verizon started the year with solid financial results for the first quarter, led by continued growth in wireless service revenue and strong earnings per share.
“We are confident in the current state of our business, and we have good momentum going into the second quarter,” he said in prepared remarks. “The network team continues to deploy leading technologies that improve our customer experience. We have 4G LTE Advanced capabilities in over 1,500 markets across the U.S. and continue to be recognized by third parties for our superior network performance.”
In the wireless segment, service revenues increased 4.4% in the first quarter, driven by customer step-ups to higher-priced plans, contributions from strong retail postpaid net additions in fourth-quarter 2018, and an increase in connections per account.
“Results were a bit mixed, as wireless top-line beat on strong ARPU, but wireless margins were far weaker than expected, and adds were a touch soft,” wrote New Street Research analyst Jonathan Chaplin in a note to investors, noting that on the strategic front, the company continues to emphasize its cost-cutting and millimeter wave 5G efforts.
Here are a few other metrics from today’s earnings conference call:
Subscribers: Verizon’s 61,000 retail postpaid net additions in the first quarter consisted of 44,000 phone net losses and tablet net losses of 156,000, offset by 261,000 other connected device net additions, primarily wearables. Postpaid smartphone net additions were 174,000.
Churn: Postpaid phone churn, of 0.84%, was up 4 basis points “and remains strong,” Ellis said. Total retail postpaid churn, of 1.12%, was up compared to last year’s 1.04%. Total postpaid device activations were down 4.7%.
Prepaid: Prepaid net losses tallied 176,000 compared to a loss of 335,000 last year. “We continue to focus on high-value accounts and profitability in our prepaid offerings,” Ellis said.