Verizon shares plunge after company cuts full-year guidance

Verizon store in San Francisco, California, USA on Tuesday, July 20, 2021.

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Verizon Promotions fell on Friday after the company reported second-quarter earnings that fell short of expectations and cut its full-year financial guidance.

“While recent results fell short of our expectations, we remain confident in our long-term strategy,” Verizon CFO Matt Ellis said in a press release.

The company’s shares fell more than 6% to $44.71 in morning trading.

Verizon’s quarterly results were released after AT&T reported its cash flow on Thursday in the second quarter, factors such as customers who waited longer to pay by phone were affected.

In its updated outlook, Verizon said it now expects wireless services revenue to increase 8.5% to 9.5%, compared to earlier expectations of 9% to 10% growth for the full year. Services and other revenues are expected to decline by 1% to a flat level. The company previously said it expects revenue to remain flat.

Adjusted earnings for 2022 are expected to be between $5.10 and $5.25 per share, compared to the company’s previous guidance of $5.40 to $5.55.

In the second quarter, Verizon said it added 12,000 retail phone subscribers who pay monthly bills, well short of the 144,000 StreetAccount estimates. To appeal to conscious consumers on a budget, the company said it launched unlimited wireless plan last week

Verizon also said its quarterly cash flow was hit by increased inventory, while operating income in its consumer segment was hurt by more active advertising.

For the three months ending June 30, Verizon reported $33.79 billion in revenue, which was virtually unchanged from the same period last year. Analysts were expecting $33.75 billion in revenue, according to Refinitiv.

Adjusted earnings were $1.31 per share. That’s a penny less than analysts had expected at $1.32, according to Refinitiv.

Read the full earnings report here.