Verizon Posts Solid Earnings, Buoyed by 2.3 Million iPhone 4 Sales
Led by strong wireless growth, Verizon Communications on Friday reported per-share earnings of 57 cents, ahead of analysts’ expectations, with revenue hitting $27.5 billion.
“In terms of earnings growth and the acceleration of revenue growth, this has been one of Verizon’s best quarters since the 2008 economic downturn,” CEO Ivan Seidenberg said in a statement. “We expanded sequential margins in both our wireline and wireless businesses, and in the second half of the year we expect Verizon to build on this strong, positive momentum to continue to drive profitable, sustainable growth.”
The company also named Lowell McAdam as its CEO, effective Aug. 1, replacing Seidenberg as part of a planned transition. Seidenberg will remain Chairman. McAdam was head of Verizon Wireless until last September and most recently has been Verizon Communications president and COO.
The company said it activated 2.3 million iPhone 4 units in the quarter and 1.2 million devices that run on its high-speed 4G LTE network. In its earnings report on Thursday, AT&T said it sold 3.6 million iPhones last quarter, though that carrier also sells the cheaper iPhone 3GS model.
Verizon also noted that its churn level for traditional postpaid retail customers was 0.89 percent — the lowest level in three years.
“We expect Verizon Wireless to gain share in the retail postpaid market and widen its network-quality lead throughout 2011,” Seidenberg said. “We also continue to see strong customer demand for FiOS Internet and TV, and for cloud and other strategic services. At the same time, we remain focused on our cost structure, as we deliver improvements in wireline margins quarter after quarter.”
Excluding acquisitions, Verizon said it added 2.2 million wireless lines during the quarter, including 1.3 million retail postpaid customers, and 890,000 wholesale and other connections. Smartphones now make up 36 percent of traditional retail customers, up from 32 percent a quarter earlier.
On the nonwireless side, Verizon said it added 189,000 net new FiOS Internet connections and 184,000 net new FiOS TV connections during the quarter, for a total of 4.5 million FiOS Internet and 3.8 million FiOS TV connections at the end of the quarter.