By George Glover

Verizon Communications stock was sliding Tuesday after the mobile network operator posted an earnings beat but said that more customers than expected had exited their phone contracts last quarter amid worries about a rise in inflation.

The telecommunications company reported adjusted first-quarter earnings of $1.19 a share ahead of the opening bell, as total operating revenue climbed 1.5% from a year ago to $33.5 billion. Analysts were expecting earnings of $1.15 a share on revenue of $33.3 billion, according to a FactSet poll.

But Verizon also said it had lost 289,000 postpaid net phone subscribers over the quarter, more than the 197,000 analysts were expecting. While the stock has so far been able to weather the storm sparked by President Donald Trump's tariffs, one risk is that its customers will switch to cheaper plans in a scenario where the levies drive up inflation and weigh on growth.

Investors appeared to zero in on the subscriber losses, not the top- and bottom-line beats. Verizon shares slipped 3.7% to $41.36 ahead of the opening bell. Futures tracking the benchmark S&P 500 were up 0.7%.

Wireless service revenue rose 2.7% from a year ago to $20.8 billion, and wireless equipment revenue was up 0.7% from a year ago to $5.4 billion. Free cash flow, a key factor in how much of a dividend a company can pay out to its shareholders, climbed to $3.6 billion for the quarter from $2.7 billion for the same period in 2024.

Verizon also stood by its 2025 guidance of adjusted earnings per share growth of between 0% and 3%. It said its outlook "does not reflect any assumptions regarding the potential impacts of the evolving tariff environment."

Shares were up 7.4% this year as of Monday's close. The benchmark S&P 500 is down 12% in 2025.

The stock has been able to beat the broader market because Verizon doesn't rely on imports or exports to make money, and offers a 6.3% dividend yield that is likely to attract investors in times of uncertainty.

The company is the first of the big three U.S. wireless carriers to report first-quarter earnings. AT&T is set to post its own earnings ahead of the opening bell Wednesday, while results from T-Mobile are due late Thursday.

AT&T shares fell 2.8% and T-Mobile stock was down 1% in Tuesday's premarket.

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 22, 2025 07:45 ET (11:45 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.