VZ - Verizon nears five-year low as slashed guidance points to no growth

Verizon stock ( NYSE: VZ ) has slipped 6.7% to its lowest level since 2017, amid rough reaction to a quarterly report where the company narrowly missed profit expectations but cut back its guidance after a big miss in wireless subscription growth.

Revenues overall were flat at $33.8B, in line with expectations. And wireless service revenues rose 9.1% to $18.4B.

But the company added just 12,000 net new postpaid phone customers when analysts had forecast adds of more than 167,000.

The slowdown resulted in some heavy guidance cuts, pressing the stock. Management reduced its 2022 expectations for wireless service revenue growth to 8.5%-9.5%, down from a previous forecast for 9-10%. For service and other revenue growth, it had expected flat results for 2022 and now sees them between -1% and flat, suggesting slim prospects for growth this year.

It had previously guided to EBITDA growth of 2-3%, and now expects -1.5% to flat. And it's trimmed full-year earnings per share expectations to $5.10-$5.25, down from a previous $5.40-$5.55.

"Although recent performance did not meet our expectations, we remain confident in our long-term strategy,” said Chief Financial Officer Matt Ellis. “We believe that our assets position us well to generate long-term shareholder value."

Rival AT&T ( T ) took flak for its Thursday report , in which it cut free cash flow guidance citing the specter of customers delaying bill payments. On Verizon's Friday conference call, Ellis said he hadn't seen delays from Verizon customers, and says 2022 challenges are a short-term setback.

Two tough telecom reports in two days are weighing on the usually defensive sector. AT&T ( T ) is down 2.9% Friday morning; along with that company's report, Barclays moved to Equal Weight on AT&T stock and raised the issue of management credibility .

"Big Three" U.S. rival T-Mobile ( TMUS ), so far coming out looking positive in comparison to AT&T and Verizon, is down just 0.2% . But T-Mobile parent Deutsche Telekom ( OTCQX:DTEGY ) is -3% in U.S. trading. Also lower are some other foreign telecoms: Telefónica ( TEF ) -1.4% ; Orange ( ORAN ) -1.5% ; Telia ( OTCPK:TLSNY ) -0.4% .

On Wednesday, Citi was more upbeat about wireless and broadband stocks, trimming its expectations a bit but still expecting "solid" growth from the group .

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