The increase in mobile customers did not include subscribers obtained via the recent Alltel acquisition and actually topped the 1.2 million net gain of rival AT&T Inc., which many analysts did not expect. AT&T has used its exclusive rights to sell the Apple iPhone to drive sales, a luxury not afforded to Verizon.
Wireless sales were up 29.6%, including a contribution from Alltel. Sales rose 9% adjusted for Alltel. Verizon ended the quarter with 86.6 million mobile customers.
Yet Verizon also reported another steep 10.4% decline in primary local-phone connections as cable rivals continued to nibble away. A sharp U.S. recession also took its toll as sales to business customers fell.
"Verizon's wireless business continues to sparkle," analyst Craig Moffett told clients in a report Monday, but he added that "things in the wireline business continue to go from bad to worse."
In the first three months of 2009, New York-based Verizon posted net income of $3.21 billion, or 58 cents a share. That was up from $3.05 billion, or 57 cents a share, in the same period a year earlier.
Revenue jumped 11.6% to $26.6 billion, though sales adjusted for the Alltel deal rose a lesser 3.3%. In January Verizon completed the purchase of Arkansas-based Alltel, a large regional carrier, to catapult past AT&T as the nation's largest wireless-phone company.
Adjusted for onetime items, Verizon would have earned 63 cents a share, compared to 61 cents a year earlier. The company was expected to earn 59 cents a share, according to the consensus of analysts surveyed by FactSet Research. During the quarter Verizon incurred onetime costs totaling 5 cents a share related to merger and acquisitions.
Wireless sales totaled $15.1 billion while wireline revenue dropped 3.8% to $11.6 billion.
The biggest bright spot in wireline was tied to further growth in Verizon's fiber network. The company added 299,000 subscribers for its fiber-television service, known as FiOS, to push its total to 2.2 million. Verizon is expanding its multibillion-dollar fiber network to more homes as it pushes back against cable rivals that now sell phone service.
On Monday, shares of Verizon (VZ:
verizon communications inc com
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Last: 30.96+0.42+1.38%4:01pm 04/28/2009Delayed quote data
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VZ 30.96, +0.42, +1.4%) , a component of the Dow industrials, slid 1.5% to $30.54 as most U.S. stocks declined.
Wireless results
Verizon has used wireless to drive growth over the past decade and to offset a long-term decline in its traditional local and long-distance phone divisions. Verizon has lost millions of local customers in recent years, with many switching to cable and others using their mobile phones exclusively.
Wireless sales, in turn, are increasingly being underpinned by higher spending on data and Internet services such as email, text messaging and Web browsing.
The average Verizon mobile subscriber spent $50.74 a month, down 0.3% from a year earlier, though data usage composed a record 28% of the typical bill. The monthly average fell mainly because Alltel customers spend less.
Reflecting the Alltel deal and poor economy, churn rose slightly to 1.47% overall and a lesser 1.14% for postpaid customers, who sign up for annual plans and pay at the end of each month. Churn reflects the percentage of customers who cancel service.
Since the recession worsened last fall, business customers canceled more wireless aircards while some consumers switched to cheaper services. Yet Verizon has the highest consumer-satisfaction ratings of any major wireless carrier and its subscribers consistently have shown the most loyalty.
Wireless profit margin, adjusted for onetime items, fell sequentially to 28.2% from 29.7%.
Wireless sales were up 29.6%, including a contribution from Alltel. Sales rose 9% adjusted for Alltel. Verizon ended the quarter with 86.6 million mobile customers.
Yet Verizon also reported another steep 10.4% decline in primary local-phone connections as cable rivals continued to nibble away. A sharp U.S. recession also took its toll as sales to business customers fell.
"Verizon's wireless business continues to sparkle," analyst Craig Moffett told clients in a report Monday, but he added that "things in the wireline business continue to go from bad to worse."
In the first three months of 2009, New York-based Verizon posted net income of $3.21 billion, or 58 cents a share. That was up from $3.05 billion, or 57 cents a share, in the same period a year earlier.
Revenue jumped 11.6% to $26.6 billion, though sales adjusted for the Alltel deal rose a lesser 3.3%. In January Verizon completed the purchase of Arkansas-based Alltel, a large regional carrier, to catapult past AT&T as the nation's largest wireless-phone company.
Adjusted for onetime items, Verizon would have earned 63 cents a share, compared to 61 cents a year earlier. The company was expected to earn 59 cents a share, according to the consensus of analysts surveyed by FactSet Research. During the quarter Verizon incurred onetime costs totaling 5 cents a share related to merger and acquisitions.
Wireless sales totaled $15.1 billion while wireline revenue dropped 3.8% to $11.6 billion.
The biggest bright spot in wireline was tied to further growth in Verizon's fiber network. The company added 299,000 subscribers for its fiber-television service, known as FiOS, to push its total to 2.2 million. Verizon is expanding its multibillion-dollar fiber network to more homes as it pushes back against cable rivals that now sell phone service.
On Monday, shares of Verizon (VZ:
verizon communications inc com
News , chart , profile , more
Last: 30.96+0.42+1.38%4:01pm 04/28/2009Delayed quote data
Add to portfolio Analyst Create alert
Insider Discuss Financials
Sponsored by:
VZ 30.96, +0.42, +1.4%) , a component of the Dow industrials, slid 1.5% to $30.54 as most U.S. stocks declined.
Wireless results
Verizon has used wireless to drive growth over the past decade and to offset a long-term decline in its traditional local and long-distance phone divisions. Verizon has lost millions of local customers in recent years, with many switching to cable and others using their mobile phones exclusively.
Wireless sales, in turn, are increasingly being underpinned by higher spending on data and Internet services such as email, text messaging and Web browsing.
The average Verizon mobile subscriber spent $50.74 a month, down 0.3% from a year earlier, though data usage composed a record 28% of the typical bill. The monthly average fell mainly because Alltel customers spend less.
Reflecting the Alltel deal and poor economy, churn rose slightly to 1.47% overall and a lesser 1.14% for postpaid customers, who sign up for annual plans and pay at the end of each month. Churn reflects the percentage of customers who cancel service.
Since the recession worsened last fall, business customers canceled more wireless aircards while some consumers switched to cheaper services. Yet Verizon has the highest consumer-satisfaction ratings of any major wireless carrier and its subscribers consistently have shown the most loyalty.
Wireless profit margin, adjusted for onetime items, fell sequentially to 28.2% from 29.7%.
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