Verizon results beat as promotions keep churn in check

[January 21, 2016]  (Reuters) - Verizon Communications Inc reported better-than-expected quarterly revenue as heavy promotions helped it to check customer defections and subscriptions rose for the carrier's high-speed Internet service.

The No. 1 U.S. wireless service provider's shares rose 1.1 percent to $44.90 in premarket trading on Thursday.

Wireless retail postpaid subscriptions, however, fell. The company added 1.5 million postpaid subscribers on a net basis in the fourth quarter ended Dec. 31, compared with 2 million a year earlier.

Sales at the company's FiOS high-speed Internet, TV and phone service rose 6.8 percent to $3.53 billion.

Another bright spot was phone sales: wireless equipment revenue rose about 28 percent to $5.40 billion as more customers chose to buy new devices with installment pricing.

Customer defections, also known as churn, at Verizon's wireless postpaid business dipped to 0.96 percent from 1.14 percent.

Verizon and AT&T Inc have been facing stiff competition from companies such as T-Mobile US Inc and Sprint Corp, which have been offering massive discounts on call and data plans.

Verizon last month announced a plan offering customers who switch from AT&T, T-Mobile and Sprint up to $650 to cover early termination fees.

The company's operating revenue rose 3.2 percent to $34.25 billion, beating the average analyst estimate of $34.1 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to Verizon was $5.39 billion, or $1.32 per share, compared with a loss of $2.23 billion, or $0.54 per share a year earlier.

Excluding items, it earned 89 cents per share, above the average analyst expectation of 88 cents.

(Reporting by Kshitiz Goliya in Bengaluru; Editing by Saumyadeb Chakrabarty)

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