Verizon takes a hit from COVID-19
The company loses 68,000 phone subscribers during the first quarter as it's forced to shut down stores.
Verizon is feeling the effects of the economic slowdown from the coronavirus: The company reported Friday that it lost 68,000 of its highly valued phone subscribers, who pay their bills monthly, during the first quarter of 2020.
As a result of slow phone sales, the company's revenue declined. Operating revenue fell to $31.6 billion from $32.1 billion in the year-earlier period. Analysts had been expecting revenue of $32.4 billion.
But the company beat analyst expectations on adjusted earnings, reporting $1.26 per share, which was a 5% increase from the same period last year.
Echoing comments from AT&T earlier this week, Verizon said that its overall revenue was affected by declines in equipment sales due to store closures amid the COVID-19 outbreak.
Still, the company saw a low postpaid phone churn rate of 0.77%. This is the rate at which customers quit the service.
Verizon CEO Hans Vestberg touted the company's strong operational performance in his statements on the earnings. And he talked up the steps that Verizon has taken to ensure customers stay connected during the crisis.
"We will emerge from this crisis stronger, knowing we provided critical connectivity to our customers, and especially our first responders, while maintaining our commitment to investing in our 5G and Fiber strategies," he said in a statement. "We are particularly proud of our employees who continue to deliver essential services to our customers and those on the front lines so they can serve others."
Verizon has taken a number of steps to ensure that customers have access to communications services in the midst of the coronavirus shutdowns across the country. Last month, it added 15GB of high-speed hotspot data. It also waived activation, overage and late fees as part of its response to the pandemic and given unlimited calling to those who are on older plans that had capped monthly phone minutes.
The carrier has also closed some retail stores to slow the spread of the virus, and it was those store closures that caused the hit in equipment sales.
