Verizon (NYSE:VZ) did not kick off 2017 to a great start as it missed earnings estimates by a penny. The company also lost wireless subscribers, which it has not done for the past several quarters. News from the earnings release is not all negative. It began the year losing ~400,000 subscribers but gained back ground by implementing the unlimited plan. During the call, CFO Matt Ellis said:
"Prior to our Unlimited launch, we had retail postpaid phone net losses of 398,000 customers. After the launch, we added 109,000 retail postpaid phone customers, which gives us momentum entering the second quarter. Overall in the first quarter, we lost 307,000 postpaid customers, consisting of phone losses of 289,000 and tablet losses of 255,000 offset by other connected devices."
Management has reiterated guidance following this miss. This shows bold confidence, because management did so knowing the pressure that follows. Ben is starting to view its strategy a little more clearly. Verizon has started to give customers less reason to want to switch mobile platforms. This is going to be a second half story. Most analysts are not buying the story being told by Verizon and will need a couple more quarters of evidence to be swayed.
Disclosure: I am/we are long VZ.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.