Verizon (NYSE:VZ) shares jumped nearly 5% in pre-market trading on Tuesday after the New York-based telecom raised its full-year free cash flow guidance and reported strong third-quarter results.
For fiscal 2023, Verizon now sees free cash flow above $18B, up from the previously estimated $17B. The company also maintained its previously guidance for cash flow from operations, within a range of $36.25B to $37.25B, and expects its capital spending plans to be at the higher end of the previously guided range of $18.25B to $19.25B.
Speaking on the conference call, Verizon Chief Executive Hans Vestberg said that the company is on track to exceed the postpaid phone additions in the coming quarter and that “momentum will continue.”
Verizon’s increase in free cash flow guidance comes just days after competitor AT&T (T) also increased its free cash flow guidance for the remainder of the year.
Amid the boost in free cash flow guidance, Verizon is maintaining its adjusted earnings per share guidance for the full year, as it expects to earn between $4.55 and $4.85 per share, above the $4.67 per share estimate. It also expects wireless service revenue growth to rise between 2.5% and 4.5%, while adjusted EBITDA is forecast to be between $47.5B and $48.5B.
The Vestberg-led Verizon earned an adjusted $1.22 per share on $33.3B during the third-quarter, above the estimates of $1.18 per share and $33.28B in revenue. During the period, Verizon added 100,000 postpaid phone subscribers on a net basis and 581,000 retail postpaid net additions.
Consumer revenue declined 2.3% year-over-year to $25.3B, as growth in service and other revenue was offset by wireless equipment revenue declines. Wireless service revenue rose 2.9% year-over-year, while postpaid churn came in at 1.04% and wireless retail postpaid churn was 0.85% during the period.
The company added 251,000 fixed wireless net additions during the period and 69,000 net new Fios internet customers during the period. Fios-related revenue came in at $2.9B, down 0.2% year-over-year.
Verizon Business generated $7.5B in revenue during the period, down 4% year-over-year, as continued declines in wireline and wireless equipment revenue was offset by higher wireless service revenue.
Verizon (VZ) will hold a conference call at 8:30 a.m. EST to discuss the results.