Shares of Verizon Communications (NYSE:VZ) popped on Thursday morning, trading 6.5% higher as of 11:15 a.m. EDT. The fuel for this fire came from Verizon's second-quarter earnings report, which it posted before the opening bell.
Verizon's revenue held flat year over year at $35.6 billion, while adjusted earnings per share rose from $0.94 to $0.96. The bottom-line result landed right where with Wall Street had expected it to, but the sales result was a modestly positive surprise.
More importantly, Verizon added 590,000 net new subscribers in the all-important postpaid smartphones category. Retail postpaid phone churn landed below 0.9% per month for the ninth consecutive quarter, setting an all-time low in the LTE era at 0.7%. Low churn equals loyal customers, so that's great news for Verizon and its investors.
This rosy report put a decisive stop to Verizon's recent share price slide, but the stock is still trading roughly 12% lower year to date.
Management gave credit for these solid results to the February launch of all-new unlimited wireless data plans. Looking ahead, Verizon simply reaffirmed its view that full-year results in 2017 should stay close to the figures posted in 2016 on both the top and bottom lines.
All things considered, Big Red earned this reprieve from share price pressures and today's market reaction makes perfect sense. Recouping what it's lost will take a couple more of these positive reports.