In short: A CPI data point, not a view: Bloomberg's price data traced August's jump in the wireless phone services category to Verizon — one of two "irregular, one-off, temporary, volatile" categories (with hotels) behind the 5 bp core surprise.
Verizon came up as a piece of inflation data, not as an investment idea. The August consumer price index (CPI) — the government's monthly measure of what households pay — came in slightly hotter than forecasters expected for "core" prices, which leave out food and energy. Wong's team at Bloomberg tracks over a million individual prices, and they found that a large part of that small miss came from one category, wireless phone plans, where Verizon had raised prices.
Her point is that a single company changing its plan prices is a one-off: it shows up once in the index and doesn't mean prices across the economy are speeding up. So she thinks markets over-reacted when they treated the report as a reason for the Fed to raise interest rates. Nothing was said about Verizon's business or stock.
2:14— Yeah. So the headline and core surprised on the high side, but when you dig into the details it is really due to a couple outliers. One of them is the wireless phone services category. So in Bloomberg we have created a massive price mapping project called Bloomberg Price Project where we collect over a million prices across 300,000 categories each month, and what we notice is that what's contributing to this jump in wireless phone plans is due to Verizon. And also there's another
In short: Q2 revenue −1% Y/Y to $34.3B ($860M miss) while adj EPS rose 7% to $1.30 ($0.03 beat); shares are up more than 10% this year while AT&T and T-Mobile are both down. The miss was largely deliberate: CEO Dan Schulman pulled back on device subsidies, so equipment revenue dropped nearly 20% (>$1.2B) as upgrade volumes fell 27%. Mobility and broadband service revenue grew 3% to $23.4B across Consumer and Business, landing inside the 2%–3% range that was Q1's open question. Subscriber gains came with less spending behind them — 184,000 postpaid phone net adds (best consumer Q2 in five years) with consumer postpaid phone churn at 84 bps, and 348,000 broadband net adds (193K fixed wireless, 155K fiber), pushing 1H mobility+broadband additions above 1 million, more than double last year. Adj EBITDA +7% to a record $13.7B at a 40% margin; FCF +24% to $6.4B. ~3,000 jobs cut and hundreds of retail stores handed to franchisees; CFO Anthony Skiadas said promo amortization has peaked but eases only gradually. Guidance rose a second straight quarter (service revenue growth 2.5%–3%, adj EPS $4.99–$5.04). But most of the work is ahead: 239K postpaid phone net adds through two quarters against a full-year guide of 875K–1M, so 2H must deliver roughly three times 1H. Schulman disclosed a $1B+ dark-fiber deal with Google for data-center connectivity (more expected by year-end) but put meaningful AI-infrastructure revenue in 2027; his contract was extended through 2028. (Recap, not a stance call.)
Verizon deliberately missed on revenue. Carriers normally buy customers by subsidising phone handsets — you get a "free" iPhone, they book the phone's price as revenue but eat the discount. New CEO Dan Schulman cut those subsidies, so upgrade volumes fell 27% and equipment revenue dropped by over $1.2 billion. That's the entire revenue shortfall, and it's the point: profit went up, cash flow rose 24%, and margins hit a record.
Remarkably, customers came anyway — the best consumer second quarter for new phone lines in five years, plus 348,000 new home-broadband customers. Verizon is also cutting about 3,000 jobs and handing hundreds of its stores to franchisees, and it raised its forecasts for a second straight quarter, which is why the stock is up over 10% this year while AT&T and T-Mobile are down. The catch is arithmetic: it has signed only 239,000 new phone lines so far this year against a full-year target of 875,000 to 1 million, so the back half has to deliver roughly three times the front half. There's also a new $1 billion-plus deal to lease fibre to Google for connecting data centres — real, but the money mostly arrives in 2027. A recap, not a call.
In short: Final trade: down 6.5% today on a restructuring charge, 6.5% dividend yield — "buy it on sale." A classic income-on-a-selloff add.
Verizon is one of the big US wireless carriers, and it's a classic income stock. It fell 6.5% on the day after taking a "restructuring charge" (a one-time accounting hit for reorganizing the business), which pushed its dividend yield up to about 6.5%. Harrington's final-trade logic is simple income investing: a high-quality dividend payer marked down on a one-day, one-off piece of bad news is a chance to "buy it on sale" and lock in a fat, dependable payout.
In short: Bill — reference. The other telecom survivor; ~5% compounded despite winning. History repeated as caution for the AI hyperscalers.
18:15But here's the catch. — No, no, no. I'm saying that's this generation's Nortell. — Well, here's why I say it. Because if you look at the forward returns of say the survivors AT&T, Verizon, they made 5% compounded for 20 years. So, those are phone companies. I just I'm going to push back on this because um you know, people who who have been scared out of those stocks, you've been scared out of making money.
In short: Reference — the other telecom survivor; ~5% compounded since 2000 despite winning. History says even 1–2 dominant AI survivors make only mid-single-digit returns.
2:29AND THEN WE KNOW WHO SURVIVED, RIGHT? IN MANY WAYS, WE HAVE THE CABLE COMPANIES. BUT AT&T AND VERIZON WERE BIG SURVIVORS OUT OF THAT ERA. AND I THINK THE ONLY PROBLEM WE DRAW OUT OF IT IS AT&T AND VERIZON SINCE 2000, HAS PRODUCED 5% COMPOUNDED FOR 25 YEARS. SO ONE OF THE ARGUMENTS BEING MADE TO YOUR POINT IS THAT, OH, NO, THERE'S GOING TO BE 1 OR 2 THAT KIND OF TAKE UP ALL THE DEMAND, WINNER TAKES ALL FORMAT, ETC.
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