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Verizon 2Q profit up 12 pct, beats expectations
2008-07-28
NEW YORK - Verizon Communications Inc.'s second-quarter earnings rose 12 percent, the company said Monday, while revenue was slightly shy of expectations and customers disconnected their landlines faster than before. The nation's second-largest telecommunications company earned $1.88 billion, or 66 cents per share, in the quarter ended June 30, up from $1.68 billion, or 58 cents per share, a year ago. Verizon said that excluding a merger-related item, it earned 67 cents a share, beating the average estimate of analysts polled by Thomson Financial by 2 cents. Revenue rose 3.7 percent to $24.1 billion from $23.27 billion a year ago. Thomson says analysts expected $24.2 billion. Investors had been expecting the weak economy to catch up to the big telecommunications companies in the second quarter. AT&T's report last week showed that customers were quicker to move to wireless and cable telephone, but the company otherwise did better than expected. The same pattern showed up in New York-based Verizon's report, even though its local-phone service areas are not the ones where the real-estate market have been hit the hardest. Verizon lost 11.4 percent of its residential landlines in the past year, up from a 10.9 percent decline in the first quarter. Verizon shares were up 20 cents to $34.65 in premarket trading. For the first time, Verizon also reported a drop in the number of DSL subscribers, as customers moved to its fiber-optic service, FiOS, where it is available. It lost 133,000 Digital Subscriber Lines while adding 187,000 FiOS Internet customers. Separately, Verizon said it started selling cable-TV service over FiOS in New York City on Monday. The company received final regulatory approval from the state two weeks ago. Verizon is in the early stages of building out its network in the city, and still needs to negotiate with landlords for access to apartment buildings. It's the first major metropolitan area to be reached by FiOS TV. As usual, the company's strongest results came from the wireless arm, which added 1.5 million subscribers for a total of 68.7 million. Verizon Wireless is a joint venture with Vodafone Group PLC. All of its $12.1 billion in quarterly revenue but only 55 percent of its $3.46 billion in operating income are recorded on Verizon's books.
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