Verizon Communications (NYSE: VZ) reported higher earnings for the second quarter that topped the Street view. The bottom line benefitted from strong growth in the wireless business. Revenues, meanwhile, declined and missed expectations. The company’s stock gained about 2% Thursday morning.
The telecom giant’s adjusted earnings rose to $1.23 per share from $1.20 per share in the second quarter of 2018, beating the estimates. Reported profit, meanwhile, declined to $0.95 per share from $1.0 per share last year.
The results benefitted from an increase in wireless customer additions, stable customer loyalty, and solid demand for wireless products and services.
Consolidated operating revenues declined modestly to $32.1 billion in the second quarter and slightly missed Wall Street’s prediction. The uptick in wireless service revenue was offset by lower equipment and wireline service revenue.
At $22 billion, revenues from the consumer division were flat year-over-year. The segment recorded 126,000 wireless retail postpaid net additions, including 73,000 phone net additions. Postpaid smartphone net additions were 209,000, which benefitted from a 5% rise in phone gross additions.
Business revenues decreased 1.1% annually to $7.8 billion, hurt by a decline in legacy product sales that more than offset growth in wireless services and fiber product revenues. Revenues from the Media division dropped about 3% to $1.8 billion in the second quarter as an uptick in native and mobile advertising was offset by weakness in desktop advertising.
“Verizon made history this quarter by becoming the first carrier in the world to launch 5G mobility. We are focused on optimizing our next-generation networks and enhancing the customer experience while we head into the second half of the year with great momentum,” said CEO Hans Vestberg.
The company said it completed the third and final phase of its Voluntary Separation Program at the end of the quarter, and realized about $480 million of expense savings year-to-date.
Looking ahead, the management expects low single-digit percentage growth for full-year adjusted earnings, which is in line with the previous guidance. Consolidated revenues are also forecast to grow in low single digits. The estimate for capital spending is between $17 billion and $18 billion.
Verizon’s stock is expected to gain momentum as the company goes full throttle on 5G deployment. It witnessed a great deal of volatility in recent months and is currently trading at the levels seen at the beginning of the year. The shares gained modestly in early trading Thursday, after closing the previous session lower.