Verizon lifts annual forecasts, signs $1 billion fiber deal with Google

By Harshita Mary Varghese

July ‌24 (Reuters) - Verizon raised ​its ​annual adjusted profit forecast and said it had secured a more than $1 billion deal with Google to provide dark fiber ‌connectivity for its data centers, sending the telecom operator's shares ⁠up 3%.

More agreements are expected by the year-end that could generate multiple billions of ‌dollars in revenue over the ‌next several years, Verizon CEO Dan Schulman said on a post earnings call.

The AI infrastructure buildout is opening a new avenue for telecom ​operators to monetize their fiber networks as hyperscalers seek high-capacity connectivity between data centers.

Verizon is in the midst of a strategic transition ⁠under new CEO Schulman, rolling out simplified mobile plans, a new loyalty program and bundled wireless-broadband ​offerings to improve customer additions after trailing rivals in subscriber growth.

The company said on Friday it gained 184,000 monthly-bill ​paying wireless subscribers in the second quarter, ‌surpassing estimates of 103,900 additions by analysts polled by FactSet.

In June, Verizon overhauled its wireless offerings with the ⁠launch of Simplicity, an unlimited wireless plan that replaces a more complex lineup with transparent pricing and includes access to the company's fastest 5G network and mobile ⁠hotspot data.

The company now expects an annual adjusted profit of $4.99 to $5.04 per share, up ​from $4.95 to $4.99 previously.

Free cash flow is expected to grow between 9% and 10% this year, higher than its previous estimate of about 7% or more.

Second-quarter revenue came ‌in at $34.3 billion, below analysts' estimate of $35.16 billion, according to data compiled by LSEG, as equipment revenue fell ‌due to slower phone upgrade activity, with customers holding on to their devices ⁠for longer.

Adjusted profit of $1.30 per ‌share, however, beat estimates ​of $1.27, helped by cost controls and reduced spending on device subsidies.

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by ‌Shinjini Ganguli)

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