Verizon posts surprise rise in wireless subscribers as 5G efforts pay off

(Corrects free cash flow figure in paragraph 5 to $5.6 billion from $8 billion)

(Reuters) – Verizon Communications (NYSE:) on Tuesday posted a surprise rise in wireless subscriber additions as more users upgraded their mobile phones and plan to access its super-fast 5G network, sending its shares up nearly 3% in premarket trading.

The carrier has been trying to aggressively build out its 5G network in the United States, in hopes that it would give it an edge over cheaper offerings from rival telecom players such as T-Mobile in a fiercely competitive market.

Verizon, whose plans typically cost more than its peers, added 8,000 net monthly bill-paying wireless phone subscribers in the second quarter, compared with estimates for a loss of 11,000, according to analysts polled by Factset.

Its results come as the sector is rattled by a Wall Street Journal report on July 9 that the company and AT&T (NYSE:) were among several telecom operators that abandoned a sprawling network of lead-clad cables, which might have contaminated water and soil.

Free cash flow, a metric closely watched by investors to help determine dividend payouts, came in at $5.6 billion, above analysts’ average expectation of $5.05 billion, according to Visible Alpha.

Verizon’s total revenue fell 3.5% to $32.6 billion in the quarter ended June 30, missing analysts’ estimates of $33.24 billion, according to Refinitiv data.

The company also maintained its forecast for profit in the range of $4.55 to $4.85 per share in 2023.

Wireless service revenue is expected to grow between 2.5% and 4.5% in 2023, it said.

Verizon Business reported 308,000 wireless retail postpaid net additions in the quarter.

Net income fell 10.3% to $4.8 billion.

(This story has been corrected to fix the free cash flow figure to $5.6 billion, not $8 billion, in paragraph 5)