Verizon Communications' third-quarter earnings exceeded Wall Street expectations, although revenue did not meet projections amidst a notable increase in postpaid phone subscriber acquisitions compared to the previous year. Adjusted earnings for the September quarter were reported at $1.19 per share, experiencing a slight dip from $1.22 per share in the same quarter last year.
Despite this minor decline, the earnings surpassed the consensus estimate of $1.18 compiled by Capital IQ. The company's operating revenue reached $33.33 billion, narrowly missing the prior-year figure of $33.34 billion. This performance was attributed to an increase in service and other revenue, which failed to completely counterbalance the decrease in wireless equipment sales.
The topline revenue figure fell short of analysts' expectations, which anticipated $33.42 billion in revenue. In trading on Tuesday, Verizon shares witnessed a drop of 4% following the earnings release. Verizon's wireless service revenue experienced a year-over-year increase of 2.7%, totaling $19.84 billion, a boost largely credited to pricing strategies implemented in recent quarters and the success of fixed wireless offerings.
Additionally, service and other revenue rose 1.7%, amounting to $27.99 billion. In terms of subscriber growth, the company reported adding 239,000 net retail postpaid phone subscribers during the quarter, a significant increase from the 100,000 reported in the same quarter the previous year. Chief Financial Officer Anthony Skiadas remarked during an earnings call that, "Gross (additions) and churn both improved year-over-year and that drove phone net (additions) of 239,000 in the third quarter," highlighting the substantial progress compared to last year. Broadband net additions accounted for 389,000, representing a decrease from 434,000 in the previous year.
Nonetheless, the company concluded the quarter with 11.9 million broadband subscribers, showcasing an annual growth rate of 16%. On the cost front, total operating expenses rose to $27.4 billion, up from $25.86 billion the prior year. Verizon disclosed it incurred $2.3 billion in charges during the quarter, which included a severance charge of $1.7 billion associated primarily with its voluntary separation program targeting select management employees in the U.S.
Additionally, the company is undertaking other efforts to reduce headcount. Looking ahead, Verizon maintains its guidance for adjusted earnings per share (EPS) in the range of $4.50 to $4.70 for the year 2024. In contrast, market analysts project an EPS of $4.57. The company also upheld its growth outlook for wireless service revenue between 2% and 3.5%. "We continue to deliver strong results in mobility and broadband, and we are on track to meet our full-year 2024 financial guidance, with wireless service revenue and adjusted earnings before interest, taxes, depreciation, and amortization trending at or above the midpoint of the guided range," stated Chief Executive Hans Vestberg, emphasizing their commitment to growth amid the evolving market landscape. In market movements, Verizon's stock traded at $41.78 on the day of the report, reflecting a change of -1.92, indicative of a percentage change of -4.40..