Verizon shares rise on strong Q2 earnings, outlook

Verizon Communications Inc. (NYSE: VZ) shares climbed in premarket trading on Friday after the telecom giant reported second-quarter earnings that exceeded analysts' expectations and raised its full-year outlook.

The New York-based company posted adjusted earnings of 94 cents per share on revenue of $32.6 billion, compared with estimates of 92 cents per share and $32.3 billion, respectively, according to Refinitiv data. Revenue grew 2.1% year-over-year, driven by higher wireless service revenue and broadband growth.

Verizon raised its full-year adjusted earnings guidance to a range of $3.70 to $3.80 per share, up from its prior forecast of $3.60 to $3.75. The company also increased its capital expenditure forecast for the year to $19.5 billion, citing investments in network expansion and 5G deployment.

Chief Executive Officer Hans Vestberg said in a statement that the company is seeing strong demand for its 5G services and broadband offerings, which is supporting revenue growth and improving customer retention. "We are well-positioned to capitalize on the ongoing digital transformation across our markets," Vestberg said.

The stock was up about 3% in premarket trading, following a 1.2% gain in the previous session. Verizon has gained roughly 8% year-to-date, outperforming the S&P 500's 6% gain over the same period.

Analysts at Jefferies maintained a hold rating on the stock but raised their price target to $40 from $38, citing the company's improved guidance and strong execution in its wireless and broadband segments. Other firms, including Wells Fargo and Morgan Stanley, also adjusted their outlooks favorably.

Investors will be watching Verizon's subscriber metrics, including postpaid phone net additions and broadband customer growth, when the company releases its detailed quarterly report later this month.