(Updated - October 24, 2023 8:48 AM EDT)
Verizon (NYSE:VZ) reported better-than-expected earnings for its third quarter and raised its free cash flow guidance.
Adjusted EPS of $1.22 topped the analyst estimate of $1.18. Operating revenue reached $33.3 billion, in line with the consensus of $33.29 billion.
Consumer revenue amounted to $25.3 billion, surpassing the estimated $25.02 billion, while business revenue was $7.5 billion, slightly lower than the estimated $7.63 billion.
Wireless Service revenue reached $19.3 billion, just below the estimated $19.35 billion.
The company added 100,000 postpaid phone net customers, while analysts were looking for a number just exceeding 68,000.
The company expects wireless service revenue growth to be in the range of 2.5-4.5%.
Moreover, Verizon anticipates that its 2023 free cash flow will exceed $18 billion, representing a $1 billion increase from its previously issued guidance.
Verizon shares initially gained 3% before extending the rally to over 5% after CEO Hans Vestberg said on the call with analysts that the company is on track to exceed postpaid phone additions in Q4.
"We expect a positive reaction in the stock owing to VZ’s solids 3Q results and improved 2023 FCF guidance. We could see modest pressure on cable stocks as VZ is now the second large telco to report a small beat to broadband net adds," Goldman Sachs (NYSE:GS) analysts wrote in a note.