By Aishwarya Venugopal
(Reuters) - Verizon Communications Inc's <VZ.N> quarterly profit fell short of expectations and the No. 1 U.S. wireless carrier added fewer subscribers than anticipated in the fourth quarter as it struggles to fend off rivals in a maturing wireless market.
Shares of Verizon, which is in the process of buying Yahoo Inc's <YHOO.O> core assets as a way to diversify, were down 2.7 percent at $51 in premarket trading on Tuesday.
Verizon added a net 591,000 retail postpaid subscribers - those who pay their bills on a monthly basis - in the quarter, far fewer than the 726,000 analysts had expected, according to market research firm FactSet StreetAccount.
Excluding items, the New York-based company earned 86 cents per share, missing the average estimate of 89 cents, according to Thomson Reuters I/B/E/S.
Net income attributable to Verizon fell to $4.5 billion, or $1.10 per share, in the three months ended Dec. 31 from $5.39 billion, or $1.32 per share, a year earlier.
Verizon said it expected 2017 consolidated revenue to be "fairly consistent" with 2016 on an organic basis.
The company, whose deal to buy Yahoo's core assets has been cast into doubt by data breaches at the internet company, said consolidated capital spending for 2017 would be in the range of $16.8 billion to $17.5 billion.
Talk that Verizon may demand for better terms from Yahoo intensified in December after the internet pioneer disclosed that a breach in 2013 had exposed data from more than 1 billion user accounts. Yahoo said in September another breach in 2014 had compromised the accounts of more than 500 million users.
Taking into account the two breaches, Yahoo said on Monday that its deal with Verizon was expected to wrap up in the second quarter instead of the first quarter, putting to rest some investor concerns about the deal's future.
Verizon said on Tuesday it continued to work with Yahoo to assess the impact of the breaches.
Verizon's operating revenue fell for the third straight quarter, to $32.34 billion, from $34.25 billion in the same period of 2015.
Churn, or customer defections, among those wireless retail customers who pay bills on a monthly basis, increased to 1.10 percent of total wireless subscribers, compared with the average analyst estimate of 1.05 percent, according to FactSet.
Verizon, which is facing intensifying competition from wireless rivals such as T-Mobile U.S. Inc <TMUS.O> and Sprint Corp <S.N>, has been offering discounts to win customers.
Retail postpaid average revenue per account fell to $141.89 in the latest quarter from $148.3 a year earlier.
Up to Monday's close, the company's shares had risen 11.4 percent in the past 12 months.
(Reporting by Aishwarya Venugopal and Supantha Mukherjee in Bengaluru; Editing by Ted Kerr)