Verizon stock falls as CEO warns of consumer subscriber decline

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Verizon Communications($NYSE:VZ) is expecting a decline in consumer wireless subscribers in the third quarter, according to CEO Hans Vestberg. Speaking at Goldman Sachs’ Communacopia conference, Vestberg said the decline would be offset by gains in business subscribers. Verizon has increased prices this year, along with its wireless rivals, which has resulted in increased customer churn in the third quarter. However, Vestberg believes the price increase was the “right decision.” Verizon is a relatively new entrant into the lower end of the market, mainly through its acquisition of TracFone Wireless. This has made Verizon the largest prepaid provider in the country. Despite this, Vestberg believes the company’s long-term dominance of the premium end of the market will continue.

Price History

On Wednesday, Verizon Communications stock opened at $41.8 and closed at $41.3, down by 1.1% from the previous day’s close of 41.8. This drop came after the company’s CEO warned of a decline in consumer subscribers. This warning caused investors to lose confidence in the company, leading to the stock drop.

VI Analysis

Verizon Communications is a large American telecommunications company with a strong focus on dividend payments and profitability. According to the VI Star Chart, Verizon is rated as strong in dividend payments, profitability, and medium in asset strength. However, the company is weak in growth potential. Overall, Verizon is classified as a “cow” type of company, which is a company that has a track record of paying out consistent and sustainable dividends. Dividend-paying companies are typically seen as being less risky, as they pursue growth at a sustainable rate. In terms of financial health, Verizon has an intermediate score of 6/10 with regard to its cashflows and debt. This indicates that the company is likely to be able to pay off its debt and fund future operations.

Summary

Verizon Communications Inc stock was down on Tuesday after CEO Hans Vestberg warned that the company would see a decline in consumer subscribers in the second quarter. The company reported first-quarter earnings that beat expectations, but subscriber growth came in below expectations. Vestberg said on a conference call with analysts that the company expects to see a “sequential decline” in its number of retail postpaid customers in the second quarter. He said that the company is seeing “slightly higher” competitive pressures in its wireless business.