Verizon reports profit and improved customer counts

Verizon Communications is fending off competitors by focusing on what it knows best: high-paying customers.

In the fourth quarter, the nation’s largest carrier added 1.5 million postpaid monthly subscribers, who tend to spend more on new devices and data service, beating analyst expectations.

The company also retained more customers than it did a year earlier, posting a churn rate — or pace of monthly defections — of less than 1 percent, which is lower than a year earlier, the company said Thursday.

“Despite an intensely competitive wireless landscape, Verizon has proven it can continue to grow its high-value subscriber base,” said Kevin Roe, an analyst at Roe Equity Research.

The company also said it earned $5.39 billion, or $1.32 per share, for the period ending Dec. 31. That compares with a loss of $2.23 billion, or 54 cents per share, a year earlier.

The results show Verizon weathering the price battles with T-Mobile US and Overland Park-based Sprint, which seek to woo away its customers with offers such as free video streaming and $1-a-month iPhones.

Verizon’s average revenue per account was $148.30, lower than the $150.25 that analysts had predicted.

Still, the company commands a premium price for its service. A typical family of four can share 18 gigabytes of data for $180 a month. By contrast, AT&T charges that same household $160 for 15 gigabytes, T-Mobile $140 for 24 gigabytes and Sprint $120 for 40 gigabytes.

Verizon has advertised the quality of its wireless service for years, and that has sunk in, chief financial officer Fran Shammo said Thursday.

“If you ask anyone, they will say Verizon has the best network and that’s really our foundation,” Shammo said. “Customers have a lot of choices, and when they find out the experience isn’t the same with other carriers, they come back to us.”

To be sure, the New York-based carrier’s subscriber gains are about 30 percent less than a year earlier, the effects of a slowing wireless market in the U.S., as most people who want a mobile phone already have one — and get a dizzying amount of offers to switch carriers.

With T-Mobile having already announced better-than-expected subscriber figures for the fourth quarter and analysts predicting Sprint will close 2015 with its first full year of user gains, Verizon’s customer additions now put the spotlight on AT&T.

The No. 2 U.S. carrier, which will post its results Tuesday, may have added just 555,000 monthly subscribers in the quarter, a 35 percent drop from a year earlier, according to analysts.

This story was originally published January 21, 2016 at 11:11 AM with the headline "Verizon reports profit and improved customer counts."