Verizon Earnings Push the Stock Higher. Why the Market Loves the Results.

Verizon raised its earnings per share and free cash flow guidance for 2025 on Monday. (Courtesy Verizon)

Verizon Communications beat Wall Street’s earnings expectations and hiked its 2025 earnings and free cash flow guidance on Monday, sending the stock higher.

The wireless carrier reported adjusted quarterly earnings of $1.22 per share, as revenue climbed 5.2% from a year ago to $34.5 billion. Analysts were expecting earnings of $1.19 a share on revenue of $33.7 billion, according to a FactSet poll.

Verizon said that a strong performance over the first half of the year, coupled with favorable tax reforms, meant it was raising its 2025 earnings guidance. It’s now expecting adjusted earnings per share to rise by between 1% and 3% this year. The 2% midpoint of the range is higher than the 1.7% annual growth that analysts were expecting.

Verizon also raised its annual free cash flow guidance to between $19.5 billion and $20.5 billion, from a previous range of $17.5 billion to $18.5 billion. That’s a key metric for investors, given that a major part of the stock’s appeal is its hefty dividend, supported by its cash flows.

Shares climbed 2.6% to $41.86 in early trading on Monday. The S&P 500 was 0.3% higher.

Verizon stock has climbed 2.1% so far this year through to Friday’s close, compared with a 7.1% gain for the S&P 500. Shares in rivals AT&T and T-Mobile US are up 18% and 2.9%, respectively, in 2025.

The only thing that could overshadow the beat-and-raise was that more customers opted to quit their phone contracts, perhaps due to cheaper plans becoming more appealing at a time when many are worried about a potential flare-up in inflation. Verizon lost 9,000 postpaid wireless subscribers across its consumer and business divisions, when analysts were looking for 13,000 additions.

Still, wireless service revenue climbed 2.2% to $20.9 billion from a year ago, which likely reflects price hikes in recent quarters. Wireless equipment revenue jumped 25% to $6.3 billion.

Write to George Glover at george.glover@dowjones.com