Verizon Communications Inc., the largest U.S. wireless communications service provider, posted first quarter profit in line with analysts’ expectations, but said an ongoing strike by thousands of wireline and TV employees could dent second quarter earnings.
The company said it earned $4.4 billion, or $1.06 per share, from a revenue of $32.2 billion during the quarter ended March 2016. Analysts were expecting earnings of $1.06, and the company's revenue was only slightly below the $32.46 billion consensus estimate by Reuters.
The company stock was down 1.82 percent during premarket trading on the New York Stock Exchange on Thursday. Shares of Verizon have gained nearly 17 percent in the last three months. In comparison, the S&P 500 Telecommunication Services Index rose 13.87 percent in three months.
“Verizon continues to expect full-year 2016 adjusted earnings to be at a level comparable to the company’s strong full-year 2015 adjusted earnings,” the company said in its earnings release. “However, given the status of labor contract negotiations, there will be pressure on second-quarter earnings due to the timing of cost reductions.”
Nearly 40,000 technicians have gone on strike in several U.S. states for the past two weeks, demanding better wages and working conditions.
The company is said to be the lead runner in the bid for Yahoo’s core business, as the U.S. internet company went through offers to put together a short list of potential suitors, according to a Reuters report.