Telecommunications and media giant Verizon Communications (VZ 0.60%) released second-quarter earnings results this morning. Verizon reported better-than-expected subscriber additions while continuing to expand its 5G coverage. The company had raised its full-year profit outlook in April and reaffirmed that guidance. Declines in the media business also slowed.

Here's what investors need to know.

Verizon 5G installation van

Image source: Verizon.

Verizon Communications results: The raw numbers


Q2 2019

Q2 2018


Total operating revenue

$32.07 billion

$32.2 billion


Adjusted earnings per share




Total retail wireless connections

93.9 million

93.8 million


Retail churn



4 basis points

Retail postpaid average revenue per account




Fios video subscribers

4.35 million

4.56 million


Data source: Verizon.

What happened with Verizon Communications this quarter?

After losing wireless subscribers in Q1, Verizon enjoyed strong subscriber growth in the second quarter. The company reported 451,000 retail postpaid net additions, ahead of the roughly 347,000 that analysts were modeling for. That total included 420,000 postpaid smartphone net additions and 245,000 phone net additions. Prepaid net losses were 213,000, which was worse than the 103,200 that the Street expected Verizon to lose.

  • Verizon Media revenue fell 2.9% to $1.8 billion, which was an improvement from the 7.2% drop in the first quarter. Mobile and native advertising gains were offset by declines in desktop advertising.
  • Earnings per share were adversely impacted by $0.28 per share due to early debt redemption costs.
  • Operating cash flow declined to $15.8 billion, in part due to higher cash taxes related to the company's Voluntary Separation Program. Verizon has now completed that program and realized approximately $480 million of expenses year to date.
  • Fios revenue increased by 1.2% to $2.8 billion, with the company adding 28,000 Fios internet connections while losing 52,000 Fios video subscribers.
  • Capital expenditures in the first half of 2019 have totaled $8 billion.

What management had to say

In a statement, CEO Hans Vestberg said:

Verizon finished strong in the first half of 2019 by delivering solid financial results while transforming the business under the new operating structure and advancing our leadership in 5G. Verizon made history this quarter by becoming the first carrier in the world to launch 5G mobility. We are focused on optimizing our next-generation networks and enhancing the customer experience while we head into the second half of the year with great momentum.

In a follow-up interview with CNBC, Vestberg predicted that half of Americans would have 5G coverage by 2020, and that half of Americans would own a 5G phone by 2024.

Looking forward

In terms of outlook, Verizon continues to expect both revenue as reported under generally accepted accounting principles (GAAP) and adjusted earnings per share to grow by a low-single-digit percentage. Cash taxes this year should be $2 billion to $3 billion higher than 2018 due to benefits that were realized last year that are not expected to repeat.

Verizon's capital expenditure outlook for 2019 is unchanged at $17 billion to $18 billion as the company continues to roll out commercial 5G service. Big Red now expects its adjusted effective income tax rate for 2019 to be at the low end of its previously provided forecast of 24% to 26%.