Verizon reported the loss of 22,000 Fios TV subscribers in the first quarter, a quickening decline in pay TV customers compared to the 13,000 users lost in the first quarter of 2017.
In a company statement, Verizon said the losses were “indicative of the continued cord-cutting trend regarding traditional linear video bundles.”
Verizon, which ended 2017 with nearly 4.62 million Fios TV subscribers, has been losing pay TV users more slowly than most major operators, with losses totaling 75,000 last year.
The company also reported gains of 66,000 wireline broadband customers compared to a loss of 27,000 in the first quarter of 2017.
Verizon, which has eschewed speculation that it will pursue a major media asset a la AT&T and Time Warner Inc., reported a 13% revenue drop in Q1 for its own media conglomerate, Oath, to $1.9 billion.
Verizon attributed the slowdown to lower display advertising performance.
Oath now includes the struggling Go90 mobile video platform as well as AOL, Huffpost, Engadget, TechCrunch, Tumblr and Yahoo.
“We began 2018 with strong momentum, and we expect it to continue throughout the year,” Verizon chairman and CEO Lowell McAdam said in a statement. “We are positioning Verizon for long-term growth while executing our strategy today and leading the way for the next cycle of growth for the industry.”
According to a new report by Wall Street research firm Barclays, Verizon’s prospects are looking up, and investors aren’t appreciating the company’s solid footing and growing options.
“Current valuation levels seem to overly discount any number of factors that could improve its earnings trajectory (i.e. service revenue recovery and its 10 x 4 cost reduction plan) as well as penalizing the company for increased 5G investments despite the fact that the technology is working better than expected,” the analysts wrote in a report issued to investors today. “Moreover, its cash generation capabilities, dividend coverage and ability to de-lever are all on sustainably better footing. While we expect Verizon’s capital intensity to increase beginning next year, the company has made a credible case that a multiuse architecture improves return characteristics for every dollar invested.”