Verizon Q4 earnings: Heavy Promotions Helped Slow Customer ‘Churn’
Verizon (VZ) 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% 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% to $3.53 billion.
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Another bright spot was phone sales: wireless equipment revenue rose about 28% 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% from 1.14%.
Verizon and AT&T (T) have been facing stiff competition from companies such as T-Mobile US (TMUS) and Sprint (S), 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% 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.