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Verizon lost more phone subscribers than expected in the first quarter — and said cuts to the federal government are partly to blame.
The company lost 289,000 postpaid phone subscribers, according to a Tuesday press release. Analysts surveyed by Bloomberg had anticipated losses of 185,000. The stock fluctuated.
Hans Vestberg, Verizon’s chairman and CEO, said on the company’s earnings call that the drop was partially driven by “pressure from federal government accounts.”
Vestberg said on the call he “saw some impact of the new government and their efficiency work.” He didn’t specify which cuts in particular weighed on subscriber numbers.
The White House DOGE Office has targeted agencies across the federal government, cutting thousands of employees’ jobs and terminating some public-private contracts. Some company executives have already said they anticipate the cuts will hurt their bottom lines.
Verizon overperformed on other metrics, though. Its operating revenue rose to $33.5 billion, more than the $33.3 billion that analysts surveyed by Bloomberg expected. Vestberg said during the post-earnings call that most of the company’s capital expenditures are not “exposed to tariffs.”
The company reported results at the front end of earnings season, which investors are closely watching for commentary about the impacts of President Donald Trump’s policies, from DOGE to tariffs.
The US wireless provider has contracts with various federal agencies, including the Department of Defense and Federal Aviation Administration. Elon Musk, the public face of DOGE, criticized Verizon’s work with the FAA earlier this year, but later rolled back some of his criticisms. SpaceX, Musk’s rocket company, could stand to benefit if the government cancels its FAA contract with Verizon.
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