By Samrhitha A and Harshita Mary Varghese
(Reuters) -Verizon Communications forecast annual profit above estimates on Tuesday after strong demand for its wireless plans and Black Friday promotions helped the U.S. carrier post its highest quarterly subscriber additions in nearly two years.
Shares of the New York-based telecom firm rose nearly 6%, as the company's consumer business also added subscribers after three straight quarters of declines.
Verizon (NYSE:VZ) - whose services typically cost more than rivals - has seen strong adoption for its flexible "myPlan", which has notched 13.1 million subscribers since its launch in May 2023.
To make the plan more attractive, the company is also offering subscriptions to Netflix (NASDAQ:NFLX) and Warner Bros Discovery (NASDAQ:WBD)'s Max streaming service in some bundles.
Verizon said it was expecting adjusted profit in 2024 to be between $4.50 and $4.70 per share, the midpoint of which was higher than the estimates of $4.59, according to LSEG data.
Its quarterly results also benefited from promotions for the Black Friday shopping event and the release of the iPhone 15 series, which drove up smartphone upgrade activity.
The company added net 449,000 monthly bill-paying wireless phone subscribers in the last three months of 2023, blowing past estimates of 223,800 additions, according to Factset.
Its consumer business reported 318,000 wireless retail postpaid phone net additions in the quarter.
"Continued growth within its fixed wireless customer base and a rebound in consumer retail postpaid plans are signs the company is still able to compete and win in what is a saturated market environment," Third Bridge analyst Jamie Lumley said.
The subscriber growth and price hikes implemented over the course of last year helped Verizon post revenue of $35.1 billion, which topped estimates of $34.64 billion, per LSEG data.
Finance chief Anthony Skiadas said on a post-earnings call that the company took "additional targeted pricing actions" in the current quarter, which could pressure the postpaid phone churn in its consumer business.
Verizon posted an adjusted profit of $1.08 per share, slightly above estimates of $1.07. But it slipped to a net loss as it took a $5.8 billion writedown after cutting the value of its declining wireline business, among other charges.