Verizon Q1 profit rises (USA)
Verizon Communications Inc. reported a 5.3% increase in profit for the first quarter from the prior-year period, helped by the acquisition of Alltel and strong growth in its wireless segment. On an adjusted basis, earnings per share for the quarter increased 3.3% and beat analysts’ consensus estimate by four cents.
First-Quarter Results
The second-largest U.S. telecommunications company’s income for the first quarter increased 5.3% to $3.21 billion from $3.05 billion in the year-ago quarter.
Net income attributable to Verizon, excluding non-controlling interest, increased to $1.65 billion, or $0.58 per share, from $1.64 billion, or $0.57 per share, in the year-ago quarter.
The results for the latest quarter included $0.03 for acquisition-related charges of $0.03 per share and merger integration costs of $0.02 per share, both primarily in connection with the acquisition of Alltel. The year-ago quarter’s results included costs related to the spin-offs of wireline access lines of $0.03 per share and merger integration costs in connection with the acquisition of MCI in 2006 of $0.01 per share.
Excluding special items, earnings per share for the latest quarter increased to $0.63 per share from $0.61 per share in the same period last year. On average, 24 analysts polled by Thomson Reuters expected the company to earn $0.59 per share for the quarter. Analysts’ estimates typically exclude special items.
Operating revenue for the quarter climbed 11.6% to $26.59 billion from $23.83 billion a year ago, as the company added revenues from its acquisition of Alltel in early January 2009. Analysts expected revenues for the quarter of $26.33 billion.
Commenting on the results, Ivan Seidenberg, Verizon Chairman and CEO said, “Our operational and financial discipline produced continued revenue and earnings growth, as well as an expansion of our already strong operating cash flows. A highlight of the quarter was our successful completion of the Alltel acquisition. We quickly began integration efforts, and we are aggressively pursuing synergies.”
Peer Performance
Among other players in the industry, AT&T Inc. (T | Quote | Chart | News | PowerRating) said its first-quarter earnings dropped 9.7% on pension charges and continuing declines in wireline voice access lines and business voice revenues. Net income attributable to AT&T for the first-quarter was $3.13 billion, or $0.53 per share, compared to $3.46 billion, or $0.57 per share, in the year-earlier quarter.
Sprint Nextel Corp. (S | Quote | Chart | News | PowerRating) will report financial results for the first quarter before the markets open on May 4. Analysts polled by Thomson Reuters expect the company to report a loss of $0.04 per share for the quarter on revenues of $8.28 billion
Segmental Results
Verizon surpassed AT&T as the biggest U.S. mobile service when it bought Alltel in January.
Verizon Wireless, the company’s joint venture with Vodafone Group plc (VOD, VOD.L), posted total quarterly revenues of $15.12 billion, up 29.6% from the same period last year. Service revenues were $13.1 billion, up 28.9% from the prior-year quarter, with continued growing demand for data services. Data revenue surged 56.2% from the year-ago period to $3.6 billion.
The wireless segment ended the quarter with 86.6 million customers, up 28.8% from the same period last year. Total churn rate for the quarter increased to 1.47% from 1.19% in the same period last year. Meanwhile, wireline revenues for the quarter declined 3.8% to $11.57 billion in the previous-year quarter. An increase of 0.7% in mass market revenues was offset by declines in global enterprise, global wholesale and other services. Broadband and video revenues from consumer customers in wireline mass markets totaled $1.3 billion in the quarter, representing year-over-year quarterly growth of 36.3%.
Revenue growth from broadband and video services drove consumer ARPU to $69.97 in the latest quarter, up 13.7% from the prior-year quarter.
For more information, please visit www.verizonwireless.com
