Verizon Communications on Tuesday published its consolidated financial report for the first quarter of the year, revealing a massive profit boost amounting to 32-percent, i.e. $4.55 billion, or $1.11 per share. The company simultaneously disclosed it lost some 24,000 phone customers and 75,000 tablet subscribers, albeit the negative trend was largely alleviated through 359,000 additions of other connected devices, with wearables being the main growth engine in the segment. Verizon’s retail postpaid connections grew by 260,000 subscribers over the three-month period ending March 31, whereas its quarterly postpaid smartphone net additions amounted to 220,000 units.
The significant profit boost has been attributed to the recently enacted tax reform, with Verizon now reiterating its previous forecast encompassing between $3.5 billion and $4 billion in 2018 savings based solely on the tax cuts enabled by Capitol Hill. The country’s largest mobile service provider also remains committed to its existing 5G plans and is still planning to start commercializing the next generation of wireless connectivity by the end of the year. The firm has yet to break down its 5G investments, having only said they’re included in its 2018 capital expenditure plan predicting between $17 billion and $17.8 billion of yearly spending. Its aggressive cost-cutting endeavor is also yielding positive results so far, having delivered some $200 million in savings in Q1 2018. Verizon’s wireline business saw 66,000 Fios Internet net adds over the same period, whereas its media unit Oath declined by 13-percent compared to Q4 2017, with Verizon dismissing year-on-year comparisons in this segment given how the division wasn’t fully integrated into its operations until last summer. This quarter, its performance decline was deemed expected and attributed to a seasonal decrease in advertiser spending, with its total turnover being $1.9 billion.
“We began 2018 with strong momentum, and we expect it to continue throughout the year,” said Verizon Chairman and Chief Executive Officer Lowell McAdam, noting how “long-term growth” is still the company’s top priority and factors into every corporate decision it makes. In terms of revenue, Verizon also posted a 6.6-percent increase compared to a year ago, having recorded a turnover of $31.77 billion over the first three months of the year. The firm is said to presently be under an investigation with AT&T over eSIM collusion, with recent reports suggesting the U.S. government is looking into allegations that the two telecom giants pursued illegal efforts to make switching between network operators more difficult for consumers.