Verizon to report more than 1.4M postpaid net additions in Q2

During an appearance on CNBC, Verizon Communications (NYSE: VZ) CEO Lowell McAdam said the company will report "over 1.4 million" postpaid net customer additions in the second quarter. That's way up from the 941,000 postpaid customers Verizon added in the second quarter of last year.

"We think this is going to be a great quarter for us," McAdam said in an interview, pointing to the 1.4 million figure. "We had very record tablet growth, we had very good churn and we delivered margins that were consistent with (what we've reported) over the last several quarters."

"We believe that the handset net additions are being driven by pricing actions early in the quarter that included matching AT&T's four-line shared data plan pricing and new single line plans that are more competitive with T-Mobile and Sprint offers. The company also selectively offered an early EIP discount promotion as a means to reduce churn," explained analysts with Jefferies in a note to investors.

"So the second quarter is very strong for us," McAdam added. "I think it's an indication that the industry is very strong."

Verizon is scheduled to report its full second-quarter earnings July 22.

The news is notable considering some had expected Verizon to post another sluggish quarter in the face of an upsurge from rival AT&T Mobility (NYSE: T) and continued strength from T-Mobile US (NYSE:TMUS). Wall Street analysts on average expected Verizon to report just 650,000 postpaid subscriber additions, according to the Wall Street Journal.

In the first quarter Verizon reported weaker subscriber growth on a year-over-year basis due to competition from AT&T and T-Mobile--the carrier in the first quarter added 549,000 retail net connections, including 539,000 retail postpaid net subscribers and 10,000 prepaid customers. The figures were lower than the 720,000 net retail customers Verizon added in the year-ago quarter.

But Verizon isn't the only carrier expecting a strong second quarter. AT&T forecast last month that it would post sharply higher postpaid subscriber additions for the second quarter than it had in the year-ago period, and also said it expects more customers than ever before to buy smartphones via its Next handset upgrade program. AT&T said it expects around 800,000 postpaid subscriber additions in the second quarter, compared to 551,000 in the year-ago quarter and 625,000 in the first quarter of 2014.

"With AT&T also pre-announcing healthy postpaid net additions (more than 800k) and momentum expected to continue at T-Mobile, we believe today's announcement suggests a very challenging quarter for Sprint (we currently estimate 326k postpaid losses)," the analysts at Jefferies wrote.

In other comments to CNBC, McAdam said Verizon is not interested in purchasing Dish Network (NASDAQ: DISH). He said the company has "some great spectrum," but that Verizon is not interested in purchasing a satellite provider.

For more:
- see these two CNBC interviews
- see this WSJ article (sub. req.)
- see this Reuters article

Special Report: Wireless in the second quarter of 2014

Related Articles:
AT&T expects 800,000 postpaid subscriber adds in Q2, 3.2M Next additions
Verizon falls to AT&T in Q1 with just 539K retail postpaid net adds
Verizon resolves massive billing system outage, rolls out XLTE to 300-plus markets

Article updated July 11 with analyst commentary.

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