Verizon Profit Rises, Weathers Economic Slowdown
Verizon Communications reported Monday a higher quarterly profit on stronger-than-expected growth in wireless subscribers, showing resilience in the face of a U.S. economic slowdown.
Shares of Verizon , the second-largest U.S. phone company, rose 2.3 percent in premarket trade after the news.
Verizon Wireless, the mobile venture with Vodafone Group, added 1.5 million net new subscribers in the first quarter, higher than the average estimate of 1.42 million additions from six analysts contacted by Reuters.
Verizon said first-quarter profit rose to $1.6 billion, or 57 cents a share, from $1.5 billion, or 51 cents a share, in the year-ago quarter.
Profit after adjusting for costs such as the spin-off of some wireline assets rose to 61 cents a share from 54 cents a year earlier, matching the average forecast on Wall Street according to Reuters Estimates.
Revenue rose 5.5 percent to $23.8 billion, also in line with analysts' expectations.
Chief Executive Ivan Seidenberg said the results showed "Verizon has weathered the current economic uncertainty."
"I am also confident of our position over the long term because we have further opportunities to drive revenue growth and further opportunities to eliminate costs," he said in a statement.
Wireless revenues rose 13.2 percent to $11.7 billion, boosted by demand for advanced, data services.
The average monthly revenue per user (ARPU) for its wireless service rose to $51.40, up 1.3 percent from a year earlier.
Wireless data service ARPU rose to $11.94, up 33.4 percent.
Churn, the industry term for cancellations, was 1.19 percent.
The rate of churn among post-paid users, or those who pay monthly fees, was 0.93 percent.
Residential access line subscriptions fell 10.9 percent from a year earlier as customers continued to switch from their traditional phone lines to cell phones and alternative services from cable operators.
Wireline operating revenues fell 1.4 percent from a year earlier to $12.3 billion.
That fall, however, was helped slightly by growth in high-speed Internet subscribers.
The company said it had a total of 8.5 million broadband customers at the end of the quarter, up 14.9 percent.
That included users of both DSL and FiOS, an advanced service based on an all-fiber network that can also deliver high-definition video.
Shares of Verizon rose to $37.90 in premarket trading from their Friday close of $37.04 on the New York Stock Exchange.