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Verizon raises profit forecast, have lost more phone subscribers

(Reuters) – Verizon Communications Inc on Tuesday increased its 2019 profit forecast and beat Wall Street estimates for quarterly profit as it focuses on cost cuts, but the U.S. mobile provider, lost more phone subscribers than analysts had expected.

FILE PHOTO: A man stands next to the logo of Verizon at the Mobile World Congress in Barcelona, Spain, February 26, 2019. REUTERS/Sergio Perez/Photo File

Verizon said it now expects a low single-digit percentage growth in the adjusted profit, after previously saying that her 2019 income would be similar to what it was a year earlier.

Verizon Chief Financial Officer Matt Ellis said the profit margins of the carrier core wireless business was pressured by accounting changes during the first quarter. Without the items, “the business did really well,” Ellis said in an interview.

Jonathan Chaplin, an analyst at New Street Research, described in the results have been mixed, such as Verizon by the senior leadership seemed to be “entirely driven by below-the-line items.”

Shares of Verizon fell 2.2 percent to $57.09 in morning trading.

The company said it lost a net of 44,000 telephone subscribers who pay a monthly invoice in the first quarter, which was marked by a few large price-cut promotions. Analysts had expected a net loss of 25,000 subscribers, according to research firm FactSet.

Verizon has launched its 5G mobile network in two cities in the United States last month at an extra cost of $10 for customers with unlimited plans. The plan is to $17 billion to $18 billion this year to build its network.

Net income attributable to the company rose to $5.03 billion, or $1.22 per share, in the first quarter ended March 31, from $4.55 billion, or $1.11 per share, a year earlier.

On an adjusted basis, Verizon earned $1.20 per share, beating analysts estimates of $1.17, according to the IBES data of Refinitiv.

The sales for Verizon Media Group, which was formerly called Oath and it contains the Yahoo and AOL media brands, was $1.8 billion during the quarter, a decrease of last year the company earned less revenue from desktop advertising.

The company lost a net 53,000 Fios video customers during the quarter, as viewers continue to shift to lower-cost streaming services. Analysts had expected that the losses of only 40,000 video customers, according to FactSet.

Verizon said that Tuesday was the cooperation with Google in order to YouTube TV, a live and on-demand video streaming service to its customers.

Verizon added 52,000 Fios internet customers during the quarter.

Total operating income rose about 1 percent to $32.13 billion euros during the quarter, falling slightly short of analysts estimates of $32.16 billion.

Reporting by Akanksha Rana, Bengaluru and Sheila Dang in New York; Editing by Susan Thomas and Marguerita Choy

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