Verizon added valuable new wireless customers in the fourth quarter of 2019 as it builds out its 5G network, but weaknesses in other parts of its business caused it to fall short of analyst expectations on earnings.
The New York-based wireless carrier said Thursday that it added a total of 790,000 new postpaid phone subscribers in the fourth quarter, compared to 653,000 subscribers during the same period a year ago. Strong subscriber growth resulted in large part from a promotion that gives customers of its high-end wireless and Fios broadband and TV plans a year of the Disney Plus streaming service for free. It's not clear how much the offer cost Verizon.
"Verizon delivered strong operational performance in the fourth quarter, highlighted by continued wireless customer growth in both Consumer and Business," CEO Hans Vestberg, said in a statement. "In 2019, Verizon drove innovation in 5G, established a new operating structure and delivered solid financial results."
But the news wasn't all rosy. The company missed profit estimates. It reported earnings, excluding some items, of $1.13 a share on $34.8 billion in revenue. Analysts had expected the company to earn $1.15 per share.
Verizon said it took a $200 million charge to write down the value of its media business, which includes the Yahoo and AOL web properties. The company reported revenue for its Verizon Media Group of $2.1 billion, which was flat compared to a year ago.
Verizon has been struggling with profitability of its media business for several quarters. In late 2018, it also took a hefty charge related to the business.
While Verizon added wireless customers at a healthy clip, it also saw declines in phone sales, and its traditional landline business was also a drag on the company's business.
Verizon has taken an early lead in the deployment of 5G networks. It offers service in parts of 31 cities. It also offers 5G-based fixed wireless broadband to homes in five cities.
Still, competition in wireless is fierce. Verizon has been facing intense competition from wireless rivals T-Mobile and AT&T, which also are rolling out 5G. In addition to pushing its 5G service, Verizon has been cutting prices and offering attractive bundles, such as Apple Music subscriptions, to entice new subscribers.
It announced in October its deal to offer free Disney Plus subscriptions with its unlimited wireless plans and with its higher-end Fios broadband and TV offers. The promotion was aimed at rival AT&T, which owns Time Warner and is expected to launch its HBO Max streaming service in May.