(Reuters) – Verizon Communications (VZ.N) posted a quarterly loss due to a $2.3-billion charge for job cuts but wireless customer growth and landline profit margins were better than some analysts expected.
The company’s shares rose 3.7 percent after growth in valuable monthly bill-paying wireless customers came in ahead of expectations.
Verizon Wireless, a venture between Verizon and Vodafone Group Plc (VOD.L), added 665,000 postpaid subscribers compared with the average expectation for 570,000 from eight analysts contacted by Reuters.
“On the surface it appears things are going in the right direction.” said Piper Jaffray analyst Chris Larsen. Cost cuts appeared to help profit margins for the company’s landline business more than expected, he added.
Larsen said landline profit margins of 22.7 percent compared to his expectation for 22 percent.
Verizon posted a second-quarter loss of $198 million, or 7 cents per share, from a profit of $1.48 billion, or 52 cents per share, in the same quarter the year before.
But excluding items such as the charge, its earnings per share would have been 58 cents compared with analyst expectations for 56 cents, according to Thomson Reuters I/B/E/S.
It said the buyout offers would lead to about voluntary departures of 11,000 employees.
Verizon’s revenue fell 0.3 percent to $26.77 billion from $26.86 billion a year earlier.
The company said the revenue reduction was driven by a $268 million downward adjustment to properly defer previously recognized wireless data revenue that would be earned and recognized in future periods.
Including prepaid customers who pay for calls in advance but do not commit to a contract, Verizon Wireless had 1.4 million net wireless customer additions.
In comparison its biggest rival AT&T Inc (T.N) reported 1.6 million net customer additions for the quarter on July 22.
Verizon’s shares were up $1 to $28 in premarket trading.
(Reporting by Sinead Carew; editing by Derek Caney)