
Verizon boosts annual forecast on demand for premium plans, tax law benefit
Shares of the company rose 3.5 per cent on Monday as it also surpassed Wall Street estimates for June-quarter sales and profit, thanks to a 2.2 per cent rise in wireless service revenue.
The telecom major has launched price-lock promotions and broadband-wireless bundles to retain users as competition intensifies from AT&T and T-Mobile, as well as broadband providers Comcast and Charter.
Verizon is also benefiting from favorable U.S. tax reform that allows companies to immediately write off the full cost of certain new equipment, finance chief Tony Skiadas said.
He estimated the legislation will boost free cash flow by $1.5 billion to $2 billion this year, prompting Verizon to raise its forecast for the metric to between $19.5 billion and $20.5 billion, up from $17.5 billion to $18.5 billion previously.
The company now expects 2025 adjusted profit to grow between 1 per cent and 3 per cent, compared with 0 per cent to 3 per cent previously.
Verizon pays the highest cash taxes among major U.S. telecoms, Wells Fargo analysts said earlier this month, adding the tax law will provide a big financial boost to the industry.
Shares of AT&T and T-Mobile were both up 2.3 per cent.
However, Verizon posted a surprise drop of 9,000 monthly bill-paying wireless subscribers in the second quarter, reeling from user churn after price hikes in January. Analysts polled by FactSet were expecting an increase of 13,000 subscribers.
To drive growth, Verizon and its rivals have been bulking up on fiber-optic assets that can tap growing consumer data use.
Verizon in May won approval from the U.S. telecom regulator for its $20 billion acquisition of fiber-optic internet provider Frontier, after it agreed to end its diversity programs.
The sharper focus on internet services helped it posted 293,000 broadband net additions in the second quarter.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


CNA
40 minutes ago
- CNA
CNA938 Rewind - Why Asian companies choose US markets for IPOs
What does it take for Asian firms to go public in the US? Justine Moss speaks with Dr Marcuz Tan, CEO of Boustead Apex, to explore what it takes to go public, and the benefits and challenges of American exchanges.


CNA
3 hours ago
- CNA
Musk says Tesla, Samsung Electronics sign chip supply deal
SEOUL :Tesla CEO Elon Musk said on Monday that the U.S. automaker has signed a deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business. On Saturday, Samsung announced a $16.5 billion chip supply deal with a major global company, without naming the client. It said the customer had requested confidentiality about the details of the deal, which will run through the end of 2033. Three sources briefed about the matter told Reuters that Tesla was the customer for the deal. The deal comes as Samsung faces mounting pressure in the race to produce artificial intelligence chips, where it trails rivals such as TSMC and SK Hynix. This lag has weighed heavily on its profits and share price. Samsung, the world's top memory chip maker, also makes logic chips designed by customers through its foundry business. Pak Yuak, an analyst at Kiwoom Securities, said the latest deal would help reduce losses at Samsung's foundry business, which he estimated exceeded 5 trillion won ($3.63 billion) in the first half of the year. Analysts say Samsung has struggled with the defection of key clients to TSMC for advanced chips. TSMC counts Apple, Nvidia and Qualcomm among its customers. The Samsung-Tesla deal is also significant for South Korea, which is seeking U.S. partnerships in chips and shipbuilding amid last-ditch efforts to reach a trade deal to eliminate or reduce potential 25 per cent U.S. tariffs. It is not clear how the order would affect Samsung's plan to start production at its new factory in Texas, which has been delayed as it struggles to win major customers. Samsung is grappling to boost production yields of its latest 2-nanometer technology, and the order is unlikely to involve the cutting-edge tech, Lee Min-hee, an analyst at BNK Investment & Securities, said. Samsung has been losing market share to TSMC in contract manufacturing, underscoring technological challenges the firm faces in mastering advanced chip manufacturing to attract clients like Apple and Nvidia, analysts said.


CNA
17 hours ago
- CNA
US commerce secretary says Trump really likes TikTok, but app has to move to US ownership
WASHINGTON :U.S. President Donald Trump likes TikTok but the Chinese-owned short video app, used by some 170 million Americans, has to move to U.S. ownership, Secretary of Commerce Howard Lutnick said on Sunday. "The President really likes TikTok, and he said it over and over again, because, you know, it was a good way to communicate with young people," Lutnick said in an interview on Fox News Sunday with Shannon Bream. "But let's face it, you can't have the Chinese have an app on 100 million American phones, that is just not okay. So, it's got to move to American ownership, it's got to move to American technology, American algorithms," he said. "I know the President is positive towards TikTok, if it can move into American hands."