Verizon (VZ, Financial) saw its shares bounce back from an initial drop of 2.7% following its Q1 earnings report. Though the telecom giant reported a modest earnings beat amid slow revenue growth, it maintained its FY25 outlook despite macroeconomic uncertainties.

The stock initially dipped due to a significant increase in postpaid phone losses, with a net loss of 289,000 wireless subscribers compared to 114,000 in the same period last year. This reflects consumer pushback against recent pricing strategies. Competition from lower-cost Mobile Virtual Network Operators (MVNOs) like Mint and Visible has also impacted Verizon's pricing power.

Investors, however, were reassured by Verizon's confidence in achieving its financial goals for the year, including adjusted EPS growth of flat to +3%, wireless service revenue growth of 2.0-2.8%, and free cash flow between $17.5-18.5 billion.

• Verizon exceeded bottom-line estimates with an adjusted EPS of $1.19. Adjusted EBITDA grew by 4% year-over-year, surpassing its FY25 forecast of 2.0-3.5%. This growth is attributed to its expanding wireless portfolio and progress in its private networks business.
• Revenue increased by 1.5% year-over-year to $33.5 billion, despite postpaid phone net losses. Wireless services revenue rose by 2.7%, while wireless equipment revenue edged up by 0.7%. Verizon Business saw a 1.2% revenue decline.
• In the Broadband segment, Verizon added 339,000 net subscribers in Q1, with fixed wireless access net adds of 308,000, bringing the total to over 4.8 million. This positions Verizon to reach its target of 8-9 million by 2028.
• Verizon's confidence in meeting its goals is supported by expectations of higher volumes, a premium mix, and customer upgrades to its new myPlan. The company is also focused on customer retention and price adjustments to reduce churn, especially as more customers adopt myPlan, which offers three-year rate locks.

Initially, Verizon's Q1 report was met with investor concern over subscriber losses. However, as the market absorbed the full report, including its positive aspects, sentiment improved, boosting the stock into positive territory.