Back in July earlier this year, we reported about Verizon Wireless’ plans to acquire Yahoo for $4.83 billion. In recent weeks however, Yahoo has hit some headlines that frankly does not do itself some favors. What we are referring to, of course, is the massive hack on Yahoo that could be considered the biggest one of its kind in history. The hack exposed the account details of at least 500 million customers. Then it gets worse -- it turned out that Yahoo was reportedly helping the government gain unauthorized access to the email messages of users, which has now blown into a full controversy with Yahoo demanding the US to declassify its surveillance request on email monitoring.
All this bad publicity is sort of a shame because Yahoo actually reported strong earnings for the third quarter of this year. Interestingly, Yahoo’s buyer, Verizon Wireless, is going through some tough times itself, as shown in its own latest quarterly results. The Big Red may be the biggest wireless carrier in the United States, but it may be starting to feel the pressure from aggressive rivals such as T-Mobile and Sprint.
Verizon Wireless revealed that it had lost 36,000 phone customers, due to tablet sales and its Hum telematics device for automobiles. The industry leader did gain 442,000 customers overall, but the latest quarterly results show that it is no longer as invulnerable as it thought. Fran Shammo, the chief financial officer of the wireless carrier, was quick to defend its latest numbers. Shammo pointed out that what really mattered was that Verizon was able to retain its most important high spending customers. But he did acknowledge that the timing of the new unlimited data plans introduced by T-Mobile and Sprint, the Samsung Galaxy Note 7 debacle, and a backlog on iPhone 7 orders had impacted the company’s third quarter performance.
For rivals of Verizon, they must be feeling a little bit more confident about their chances of catching up to the leader. Sprint also published its quarterly results this week, and it highlighted how the number of postpaid customer additions during the third quarter of this year has increased five times compared to the third quarter of last year. Similarly, T-Mobile has shown growth when it comes to postpaid sign ups. Verizon also reported a worse churn rate for Q3 at 1.04 percent, compared to the same period the previous year.
With regards to earnings, the Big Red reported a profit of $3.75 billion, or $0.89 per share, for the third quarter. This figure is down from the $4.17 billion, or $0.99 a share, it registered during the third quarter in 2015. Verizon’s revenue also decreased 6.7 percent to $30.93 billion -- industry watchers had projected that the carrier would post revenues of $31.09 billion for Q3.
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