July 24 (Reuters) – Verizon raised its annual forecast for adjusted profit and free cash flow, as the network provider’s latest unlimited 5G plans and rewards programs helped it add more wireless subscribers than expected in the June quarter.
Shares of the company were up 3% in premarket trading on Friday.
The company is in the midst of a strategic transition under new CEO Dan Schulman, rolling out simplified mobile plans, a new loyalty program and bundled wireless-broadband offerings to improve customer additions after trailing rivals in subscriber growth.
Verizon gained 184,000 monthly-bill paying wireless subscribers in the second quarter, surpassing estimates of 103,900 additions by analysts polled by FactSet.
In June, Verizon overhauled its wireless offerings with the launch of Simplicity, an unlimited wireless plan that replaces a more complex lineup with transparent pricing and includes access to the company’s fastest 5G network and mobile hotspot data.
The company also introduced Verizon One, a bundled offering that pairs wireless service with home internet under a single monthly bill, mirroring a broader industry push towards convergence to deepen customer relationships.
“We are gaining subscribers and earning long-term retention based on real value rather than subsidized promotions,” CEO Schulman said.
The company now expects an annual adjusted profit of $4.99 to $5.04 per share, compared with prior guidance of $4.95 to $4.99.
Free cash flow is expected to grow between 9% and 10% this year, higher than its previous estimate of about 7% or more.
Second-quarter revenue came in at $34.3 billion, below analysts’ estimate of $35.16 billion, according to data compiled by LSEG, as equipment revenue fell due to slower phone upgrade activity, with customers holding on to their devices for longer.
Adjusted profit of $1.30 per share, however, beat estimates of $1.27, helped by cost controls and reduced spending on device subsidies.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shinjini Ganguli)
