Verizon profits beat forecasts as lockdowns boost internet demand

Verizon Communications topped Wall Street’s second-quarter financial estimates on strong demand for its phone and internet services by house-bound customers.

The telecom giant said Friday that coronavirus-induced stay-at-home orders prompted a shift to remote working and learning, helping it add 173,000 postpaid phone customers, well above analysts’ estimate of 61,200.

But even as more customers were stuck at home, Verizon said it continued to lose pay-TV subscribers as cord cutting accelerated. Chief Executive Hans Vestberg said the company lost 81,000 net pay TV subscribers for its FiOS consumer video service in the second quarter, compared with a loss of 52,000 in the year-ago period.

At Verizon’s media division, which includes Yahoo, HuffPost and TechCrunch, the impact of the coronavirus throttled advertising and sent revenue for the unit down 24.5 percent from the year-ago period to $1.4 billion. Verizon said it saw revenue trends improving a bit in June, however.

Overall, Verizon’s net income rose 18.9 percent to $4.84 billion, or $1.13 a share, for the quarter ended June 30.

The company said the decrease in revenue was due to the fact that it temporarily closed its retail stores since mid-March amid the coronavirus outbreak. At the end of June, Verizon said roughly 60 percent of its stores were open.

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Schlumberger To Reduce More Than 21,000 Employees – Quick Facts

Schlumberger Limited (SLB) said, in response to market conditions, the company recorded $3.7 billion of pretax restructuring and asset impairment charges, including $1 billion of severance costs, as of the end of the quarter. The company noted that the severance is associated with reducing its workforce by more than 21,000 employees. The vast majority of this charge is expected to be paid during the second half of 2020. The company said the remaining portion of the charge largely relates to the non-cash impairment of certain assets.

Schlumberger CEO Olivier Le Peuch said: “Looking at the macro view in the near-term, oil demand is slowly starting to normalize and is expected to improve as government measures support consumption. However, subsequent waves of potential COVID-19 resurgence pose a negative risk to this outlook.”

For the second quarter, excluding charges & credits, earnings per share was $0.05 compared to $0.35, prior year. On average, 27 analysts polled by Thomson Reuters expected the company to report a loss per share of $0.01, for the quarter. Analysts’ estimates typically exclude special items.

Second quarter revenue declined 35% year-on-year to $5.36 billion from $8.27 billion. Analysts expected revenue of $5.36 billion for the quarter.

Stock Alert: Sierra Wireless Shares Hit 52-Week High

Sierra Wireless (SWIR) hit a 52-week high of $12.49 Friday morning, and is currently trading at $11.48, up $1.93 or 20.25%. For the past one year, the stock has been trading in the range of $4.31 – $12.49. Trading volume is rising over 434K versus an average volume of 239K shares.

The company, on Thursday, announced a definitive agreement to divest its Shenzhen, China-based automotive embedded module product line for US$165 million in cash.

Sierra Wireless expects that about 150 of its employees would become employees of Rolling Wireless. About 120 of these employees are located in Mainland China. The other 30 are located in Europe or in the APAC region.

The transaction is expected to close in the Fourth Quarter of 2020 and remains subject to customary closing conditions, including approval from China’s Ministry of Commerce.

European Economics Preview: Eurozone Flash PMI Data Due

Flash Purchasing Managers’ survey data from euro area and retail sales from the UK are due on Friday, headlining a busy day for the European economic news.

At 2.00 am ET, the Office for National Statistics releases UK retail sales for June. Economists forecast sales to rise 8 percent on month, slower than the 12 percent increase in May.

At 3.00 am ET, producer prices from Spain and industrial production from Austria are due.

At 3.15 am ET, IHS Markit is scheduled to issue France’s flash Purchasing Managers’ survey data. The composite PMI is seen rising to 53.5 in July from 51.7 in June.

At 3.30 am ET, Germany’s flash PMI data is due. Economists forecast the composite indicator to improve to 50.3 in July from 47.0 in June.

At 4.00 am ET, IHS Markit is set to publish euro area PMI data. The flash composite output index is expected to rise to 51.1 in July from 48.5 in June.

Half an hour later, UK flash composite PMI survey data is due. The composite index is seen at 51.1 in July versus 47.7 in the previous month.

At 6.30 am ET, Russia’s central bank is set to announce its interest rate decision. Economists expect the central bank to cut its key rate to 4.25 percent from 4.50 percent.

U.S. Leading Economic Index Extends Rebound In June

Reflecting improvements brought about by the incremental reopening of the economy, the Conference Board released a report on Thursday showing another significant increase by its reading on leading U.S. economic indicators in the month of June.

The Conference Board said its leading economic index jumped by 2.0 percent in June after soaring by an upwardly revised 3.2 percent in May and plunging by 6.3 percent in April.

Economists had expected the index to surge up by 2.5 percent in June compared to the 2.8 percent spike originally reported for the previous month.

Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board, noted labor market conditions and stock prices made particularly strong positive contributions.

“However, broader financial conditions and the consumers’ outlook on business conditions still point to a weak economic outlook,” Ozyildirim said.

He added, “Together with a resurgence of new COVID-19 cases across much of the nation, the LEI suggests that the U.S. economy will remain in recession territory in the near term.”

The report said the coincident economic index spiked by 2.5 percent in June following a 1.6 percent jump in May.

Meanwhile, the lagging economic index tumbled by 2.5 percent in June after slumping by 1.2 percent in the previous month.