Home Latest News Why Verizon Stock Dropped Today – The Motley Fool

Why Verizon Stock Dropped Today – The Motley Fool





Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Shares of Verizon (VZ -1.06%) fell 4.5% on Friday, as investors grew increasingly concerned about the wireless giant’s waning customer growth.
Verizon’s revenue rose 4% year over year to $34.2 billion in the third quarter. That was slightly above Wall Street’s estimates for revenue of $33.8 billion. 
However, Verizon gained only 8,000 postpaid phone subscribers, who pay monthly bills and are generally the most profitable customers for wireless carriers. Analysts expected Verizon to report over 35,000 postpaid phone additions. 
The shortfall is more alarming when viewed against AT&T‘s (T -1.44%) stellar results released on Thursday. AT&T gained 708,000 postpaid phone subscribers in the third quarter, furthering a streak of impressive customer gains.
Verizon’s price increases may be partially to blame for its comparatively weaker performance. The wireless titan recently added an “Economic Adjustment Charge” to some of its data plans and increased fees for others to offset its rising costs. 
Yet these fees have yet to do much to bolster Verizon’s bottom line. The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) — a closely followed profitability metric for telecoms — declined by 0.4% to $12.2 billion.  
Verizon expects its full-year adjusted EBITDA to fall by as much as 1.5% in 2022. To stabilize its declining profit margins, management is implementing a new cost-reduction plan to cut expenses by up to $3 billion by 2025. 
But that might not be enough to fend off intensifying competition. AT&T is now a more formidable foe following the divestiture of its Warner media assets in April. The newly streamlined AT&T has refocused its attention and vast financial resources on its core wireless business — and it could continue to outpace Verizon in the all-important race for postpaid phone subscribers in the quarters ahead.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
Market-beating stocks from our award-winning analyst team.
Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/08/2023.
Discounted offers are only available to new members. Stock Advisor list price is $199 per year.
Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.

Market data powered by Xignite.

source