By Anjali Athavaley
NEW YORK (Reuters) - Verizon Communications Inc's (N:VZ) quarterly revenue topped Wall Street analyst estimates on Thursday and the company added more phone subscribers than expected, sending shares of the No. 1 U.S. wireless carrier up in mid-morning trading.
Verizon has struggled to fend off smaller rivals T-Mobile US Inc (O:TMUS) and Sprint Corp (N:S) in a mature market for wireless service.
AT&T Inc (N:T), its No. 2 competitor, plans to diversify its revenues with an $85.4-billion acquisition of Time Warner Inc (N:TWX), a deal that, if approved by regulators, would give it ownership of premium content like HBO.
Verizon maintains it does not need to do a large content acquisition. "Just through licensing content, we can have access to content that we want to distribute to our customers," Chief Financial Officer Matthew Ellis said in an interview.
He said Verizon was continuing to work on a deal for content rights referenced by Chief Executive Officer Lowell McAdam at an investor conference in September but declined to comment on the type of content or partner.
Verizon said that it added 274,000 phone subscribers who pay a monthly bill on a net basis. Churn, or rate of defections for all customers paying a monthly bill, including tablet subscribers, was 0.97 percent.
Wells Fargo (NYSE:WFC) analysts had expected subscriber additions of 185,000 and churn of 1.05 percent. They said in an earlier note that the quarter was relatively less competitive, with consumers pushing out decisions to switch carriers until the fourth quarter when Apple Inc's (O:AAPL) iPhone X is expected to debut. New phone launches typically give customers incentive to upgrade plans and change service providers.
Verizon shares, part of the Dow Jones Industrial Average (DJI), rose 2.4 percent to $49.82.
Verizon also said it lost 18,000 video subscribers in the third quarter, citing a shift from traditional pay-TV packages to cheaper streaming services. Other companies have pointed to the trend, saying it contributed to a more competitive environment during the period.
Revenues in its Oath media business, which includes AOL and Yahoo (NASDAQ:AABA), were $2 billion in the first full quarter to include both internet businesses.
Net income attributable to Verizon was $3.62 billion, or 89 cents per share, in the third quarter ended Sept. 30, flat from the year earlier period.
Excluding items, earnings per share was 98 cents.
Total revenue rose to $31.72 billion from $30.94 billion a year earlier.
According to Thomson Reuters I/B/E/S, analysts had expected adjusted earnings per share of 98 cents and revenue of $31.45 billion.