Updated Aug 6 at 2:39pm ET.
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SpaceX is positioning its Starlink Mobile service as a direct competitor to traditional carriers like Verizon. The company believes it can provide cellular coverage, particularly in dead zones and during outages, without the heavy spending on physical towers that traditional providers require.
This is a potential threat to Verizon's long-term grip on the premium wireless market. While Verizon's network is currently far more reliable for everyday use, a low-cost satellite competitor could eventually pull away customers who only need basic connectivity or live in rural areas.
Source: Market Watch
Verizon is adding pet tracking to its family safety dashboard through a partnership with Fi. By including pets in its standard family app, the company is trying to make its service more essential to the household. This is a small but smart move to reduce churn, which is the rate at which customers leave for a competitor, by bundling more services into a single subscription.
Source: Business Wire
Verizon has joined other major carriers to launch MagicalAuth, a security tool designed to stop AI-driven fraud. The system uses hardware-based security on phones rather than sending a code via text message, which can be intercepted by hackers. While this is a technical upgrade, it helps protect the integrity of the network and reduces the costs associated with managing customer fraud cases.
Source: Business Wire
Bain Capital is putting $1.5 billion into Eaton Fiber to speed up the expansion of Verizon’s fiber-optic internet. This funding allows the network to grow faster than Verizon could manage on its own without taking on more debt.
For a long-term owner, this is a clear win. Fiber is more reliable and profitable than older copper lines, and using outside capital to build it helps Verizon reach more homes while keeping its own cash free to pay down its large debt load.
Source: Business Wire
Verizon reported a strong second quarter, earning $1.30 per share, which was slightly ahead of what analysts expected. While total revenue of $34.25 billion was a bit lower than targets, the underlying business is getting healthier. The company added 184,000 postpaid phone customers, the kind who pay a monthly bill and are most profitable, marking its best second-quarter performance in five years.
Management is confident enough in this momentum to raise its profit and cash flow forecasts for the rest of the year. The company is successfully moving customers toward higher-priced 5G plans and expanding its home internet service. For long-term investors, the key takeaway is that Verizon is finally growing its customer base again while spending less on the expensive phone discounts that used to eat into its profits.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Analysts recently adjusted their price targets for Verizon in a flurry of activity on July 27. Most experts are cautious, with 35 of 61 analysts holding a neutral view and the average target price suggesting an 8% upside.
Management has a very consistent habit of clearing the bars they set, beating profit estimates in seven of the last eight quarters.
| Expectation | |
|---|---|
| EPS | $1.29 |
| Revenue | $34.80B |
