Verizon grabbed headlines Thursday morning with wireless results that handily beat expectations, but it was more of a mixed bag on the wireline side of the house.
Wireline revenues of $7.8 billion were up 1.2 percent year over year, buoyed by the acquisition of XO Communications. Without that boost, the carrier said wireline revenues would actually have declined 2.8 percent from the second quarter 2016.
Consolidated Fios revenues increased 4.4 percent to $2.9 billion, driven by a shift to fiber-based products. Organic revenues from those fiber products were up more than 3 percent, Verizon said.
That fiber strength was reflected in the carrier’s Fios Internet segment, which exited the quarter with 49,000 net additions in the second quarter 2017 compared to a loss of 13,000 in the same period last year. That number also beat Wall Street consensus estimates of 36,000 net Fios internet additions, and MoffettNathanson analysts noted that success likely reflects “the early success of Verizon’s pivot to selling standalone 1 [Gbps] broadband across their Fios territory.” That venture is “what is arguably the most compelling (and strategically well-grounded) positioning they have ever had,” the analysts continued.
But the carrier also lost 72,000 DSL customers, leading to an overall drop of 23,000 in the number of total broadband connections.
Still, Verizon CFO Matt Ellis said the boost in demand for fiber-based products reinforced the carrier’s plan to further invest in fiber going forward. Though he declined to comment on specific plans, Ellis did reveal fiber would be part of the carrier’s 2018 spending. Wireline capital expenditures hit $1.2 billion in the second quarter 2017, up 46 percent from $814 million in the same period last year.
Fios continued to lose video subscribers due to over-the-top offerings and other competitive offers, but staunched the bleeding to just 15,000 net losses. That figure marked an improvement from 41,000 net losses in the second quarter 2016.