Verizon reports bigger-than-expected fall in quarterly revenue

By Malathi Nayak and Aishwarya Venugopal

REUTERS - Verizon Communications Inc, which plans to buy Yahoo Inc to jumpstart its digital business, reported lower-than-expected quarterly revenue on Tuesday, citing a nearly seven-week strike by 40,000 wireline workers.

The company also added fewer postpaid, or monthly, wireless subscribers than expected in the second quarter, and its shares slipped 0.4 percent in premarket trading.

Total operating revenue for the No. 1 U.S. wireless company fell to $30.53 billion from $32.22 billion a year earlier. Analysts on average had expected $30.94 billion, according to Thomson Reuters I/B/E/S.

The strike, which ended in June, involved network technicians and customer service representatives of Verizon's Fios high-speed internet, telephone and television services.

The strike stalled work, and the company reported net declines of 13,000 Fios internet connections and 41,000 Fios video connections for the quarter.

Still, Fios revenue rose 3.7 percent to $2.8 billion from a year earlier.

Verizon had said on Monday that it would buy Yahoo's core internet properties for $4.83 billion in cash to expand its digital advertising and media business and compete with Facebook Inc and Alphabet Inc's Google.

Net income attributable to Verizon fell to $702 million, or 17 cents per share, from $4.23 billion, or $1.04 per share, a year earlier.

The strike reduced earnings by about 7 cents per share, the company said.

Verizon also took a non-cash charge of $2.2 billion, mostly for new labor contracts and the sale of local landline businesses to Frontier Communications Corp.

Excluding special items, earnings of 94 cents per share exceeded the analysts' average estimate of 92 cents.

Verizon added a net 615,000 wireless retail postpaid subscribers, compared with 784,000 expected on average by analysts surveyed by market research firm FactSet StreetAccount. The company is battling rivals such as Sprint Corp, which is offering half-off discounts.

At Monday's close of $55.87, Verizon's stock had risen about 21 percent this year.

(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Ted Kerr and Lisa Von Ahn)