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Investing.com - Verizon Communications has reported retail postpaid phone net change for the first quarter that missed analysts expectations, as the firm backed away from promotions to attract customers to help protect profits.
Wireless retail postpaid phone subscribers slipped by 289,000 during the period, down from 114,000 versus a year ago and worse than Bloomberg consensus projections of 185,471. Shares in Verizon (NYSE:VZ) fell in premarket U.S. trading on Tuesday.
In March, Verizon executives warned that off-season promotional activities by its rivals would weigh on wireless subscriber growth in the first quarter.
The company has moved to back away from incentives since a promotion-fueled December quarter, but its peers have not, leading to rising competition, Chief Revenue Officer Frank Boulben said at a conference last month.
U.S. telecom groups have been relying on incentives to help give some lift to customer growth in an already-saturated market. While this strategy has supported new customer additions, it has exacerbated worries over near-term profits.
Verizon has also flagged that customers, concerned by the state of the U.S. economy and a slow roll-out of device upgrades, were holding back on some purchases.
Adjusted earnings before interest, taxes, depreciation and amortization rose by 4.1% year-on-year to $12.6 billion, compared with estimates of $12.35 billion. Operating revenue of $33.50 billion also topped projections.
The company reiterated its full-year guidance for total wireless service revenue growth of 2.0% to 2.8% and an increase in adjusted core income of 2.0% to 3.5% -- although it noted that the outlook "does not relfect any assumptions regarding the potential impacts" of U.S. President Donald Trump’s evolving tariff policy.