Verizon profit falls to $3.95 billion on BT joint venture costs

Verizon signs $1 billion Google dark-fiber deal, raises full-year outlook

Verizon Communications said Friday its quarterly profit fell to $3.95 billion, or 92 cents a share, from $5.12 billion, or $1.18 a share, a year earlier, as $1.8 billion in pretax special items — including a $746 million loss tied to its new international joint venture — weighed on earnings. Revenue slipped 0.7% to $34.25 billion, below analyst estimates of $35.16 billion, which the company attributed to a nearly 20% decline in equipment revenue as customers hold onto their mobile devices longer and to its decision to scale back new device subsidies.

Adjusted earnings per share, which strip out one-time items, came to $1.30, ahead of the $1.28 that analysts polled by FactSet had expected. Shares were flat in premarket trading.

The profit decline was driven primarily by costs related to the joint venture with Britain’s BT Group, announced last month, that combines the two carriers’ international operations and allows each to focus more on their domestic businesses. Excluding those special items, the company’s core profitability exceeded expectations.

Mobility and broadband service revenue, which accounts for the bulk of Verizon’s top line, rose 2.8% to $23.4 billion, ahead of analyst forecasts of about $23.3 billion. The company added 348,000 net broadband connections in the quarter.

Chief Executive Dan Schulman said the results show the company’s strategy is producing “a structural inflection point.” He pointed to a new plan unveiled last month that offers a line with unlimited data for $45 a month for current customers, or $30 for those who switch from another carrier, below its standard $55-a-month starting price. “We are accelerating across our key metrics, achieving a step-change in churn reduction while lowering our customer acquisition and retention costs,” Schulman said.

Verizon also disclosed a deal with Google worth more than $1 billion, under which the search and cloud giant will use Verizon’s dark fiber to connect its data centers. Schulman said the company expects to announce more deals with other partners this year that could be worth billions in revenue over the next several years. The company is in the early stages of retrofitting many of its facilities that house network equipment into data centers, and new revenue tied to artificial intelligence infrastructure would be incremental and begin to appear in results starting next year, he said.

Separately, Verizon said Friday it extended Schulman’s contract by a year, through the end of 2028.

Last week, Verizon disclosed plans to cut about 3,000 workers, including roughly 500 corporate employees, and divest hundreds of its retail stores to franchise owners. The move follows a similar round of layoffs and store sales last fall.

For the full year, Verizon raised its adjusted earnings-per-share outlook to a range of $4.99 to $5.04, up from its previous range of $4.95 to $4.99, and continues to project total retail postpaid phone net additions of 875,000 to one million.