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What’s happening: Shares of Verizon Communications declined on Monday, after the company released its second-quarter results.
What happened: The telecom operator reported earnings in-line with expectations, although its sales missed market views.
The company also reported a sharp decline in prepaid wireless subscribers for the latest quarter.
How were the results: The New York-based company reported meagre growth in sales in the three months ended in June.
Why it matters: The federal internet subsidy ending in May resulted in Verizon’s consumer business losing 624,000 wireless retail prepaid subscribers during the second quarter. The company performance was also impacted by a lower number of people upgrading their phones.
Total wireless service revenues rose 3.5% year-over-year to $19.8 billion, amid an increase in Consumer wireless service revenues.
Verizon added 148,000 net monthly bill-paying wireless phone subscribers during the quarter, topping market expectations of 118,000, after losing 68,000 subscribers in the earlier quarter. Retail postpaid net additions were 340,000 during the quarter.
The company saw 391,000 total broadband net additions during the second quarter, while ending the quarter with 11.5 million broadband subscribers, representing a 17.2% year-over-year increase.
Total Verizon Business revenues gained 2.4% year-over-year to $7.3 billion, while total Verizon Consumer revenues grew by 1.5% to $24.9 billion.
The company ended the quarter with free cash flows of $8.5 billion, up from $8.0 billion in the year-ago period.
Management reiterated their full-year guidance for wireless service revenue growth of 2.0%-3.5% and earnings of $4.50 to $4.70 per share.
How shares responded: Verizon’s shares fell 6.1% to close at $39.09 on Monday, following the release of quarterly results. The stock has lost around 5% over the past month.
What to watch: Investors will watch Apple’s release of a new iPhone later this year, which could trigger people to upgrade their phones.
Context: The EUR/USD forex pair edged higher on Monday amid some weakness in the greenback.
Details: US President Joe Biden announced plans to drop out of the race for President at the upcoming US election in November. Biden endorsed Vice President Kamala Harris for the Democratic nomination.
Global markets showed slight to no reaction to this latest news, as it was widely speculated. The US dollar started the week on a lower note with some uncertainty around whom the Democratic party may name as the Presidential candidate.
The weakness in the US dollar lent support to the EUR/USD forex pair on Monday. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.1% to 104.31.
With no major economic reports from the US or Eurozone on Monday, investors focused on the monetary policy outlook. The European Central Bank had maintained its interest rates last week, without providing any insight into its next move.
The EUR/USD forex pair gained around 0.1% to 1.0892 on Monday. The STOXX Europe 600 Index rose by 0.93% to close at 514.79.
What to watch: Investors await the release of the consumer confidence indicator from the Eurozone today. Eurozone’s consumer confidence had improved by 0.3 points to -14.0 in June and is expected to increase slightly to a reading of -13.2 in July.
Markets will also focus on some major economic reports, due to be released later in the week, including the S&P Global PMI from the Eurozone and the US. The US will also release its GDP for the second quarter on Thursday and Personal Consumption Expenditures Price Index on Friday.
Other Markets: US trading indices closed higher on Monday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.32%, 1.08% and 1.54%, respectively.
Ukrainian foreign minister Dmytro Kuleba will be visiting China today to discuss ending the war with Russia. The news sent the safe-haven US dollar index slightly lower in forex trading this morning.
Kuwait’s annual inflation rate eased to 2.8% in June, from 3.2% a month ago, lending support to the KWD/USD forex pair.
Mexico’s economic activity rose by 1.6% year-over-year in May. This marked a significant easing from the 5.4% gain recorded in the prior month, which sent the MXN/USD pair slightly lower in forex trading this morning.
Iceland’s producer prices rose by 4.7% year-over-year in June, higher than the 2.3% gain recorded in the prior month, which exerted pressure on the ISK/USD forex pair.
South Korea’s producer inflation accelerated to 2.5% year-over-year in June, from 2.3% in the previous month. However, the KRW/USD pair rose in forex trading this morning.
South Africa’s leading business cycle indicator, Turkey’s consumer confidence index and Central Bank of Turkey’s interest rate decision, US Redbook index, existing home sales, Richmond Fed manufacturing index, Richmond Fed services index, money supply M2 and API crude oil stock change, Indonesia’s foreign direct investment, China’s foreign direct investment, as well as India’s Union Budget 2024.
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