Verizon raised its annual forecasts while securing an infrastructure agreement worth more than $2 billion with Amazon’s cloud unit, AWS. The developments place the company’s earnings outlook and expanding data center connectivity business in focus.
The telecommunications company lifted its full year adjusted earnings per share forecast to a range of $5.04 to $5.06. Its previous forecast called for adjusted earnings per share between $4.99 and $5.04.
The revised guidance raises both ends of the expected range. The former upper limit of $5.04 now represents the bottom of Verizon’s updated forecast, while the new ceiling reaches $5.06.
Verizon’s third quarter revenue presented a less favorable result. Revenue totaled $34.3 billion, falling below analyst estimates of $34.74 billion, according to data from LSEG.
Lower device upgrade volumes pressured revenue during the quarter. Customers held on to their phones longer after Verizon began reducing the device subsidies that had helped support upgrades.
The revenue shortfall therefore accompanied a stronger annual earnings forecast rather than preventing the company from raising its expectations. Verizon did not allow weaker device upgrade activity to derail the improved adjusted earnings per share range.
The latest developments arrive a year into CEO Dan Schulman’s tenure. During that period, Verizon has pursued a broad overhaul that includes restructuring its operations and simplifying the wireless products offered to customers.
That simplification effort produced the Simplicity plan, which Verizon launched in June. The plan introduced transparent pricing and unlimited data as part of the company’s changes to its wireless offerings.
Beyond its traditional wireless operations, Verizon is pursuing demand tied to data centers and artificial intelligence computing. Its agreement with AWS calls for Verizon to provide high capacity fiber optic connectivity for AWS data centers.
The connectivity is intended to enable faster and more reliable data transfers. Those capabilities will support growing AI computing workloads, which place substantial emphasis on the movement of data between connected facilities.
The AWS agreement carries a value of more than $2 billion, making it a major component of Verizon’s infrastructure activity described in the announcement. The arrangement centers on fiber connectivity rather than the company’s consumer device upgrade business.
AWS is not Verizon’s only disclosed data center connectivity customer. In July, Verizon announced an agreement worth more than $1 billion with Google to connect data centers through dark fiber.
The Google and AWS agreements both connect Verizon’s fiber capabilities with expanding data center requirements. Each deal involves a major technology company and carries a stated value exceeding $1 billion.
Verizon’s July announcement highlighted how rising AI demand could create a new revenue stream for telecommunications operators. That opportunity would extend beyond the traditional wireless and broadband services that have long defined their customer businesses.
The AWS deal builds on that same theme by linking Verizon’s network infrastructure directly to AI computing workloads. Under the arrangement, AWS data centers will receive the high capacity fiber optic connections required for faster and more dependable data transfers.
At the same time, Verizon’s third quarter results show that its established operations remain exposed to changing customer behavior. Lower subsidies were followed by customers keeping phones longer, reducing upgrade volumes and adding pressure to quarterly revenue.
The company’s current picture combines a raised adjusted earnings forecast, a quarterly revenue miss, an operational restructuring and two large data center connectivity agreements. Together, those disclosed developments show Verizon simplifying wireless offerings while pursuing infrastructure business tied to rising AI demand.