Verizon disappointed Wall Street and the stock ended Friday down - the company didn't add subscribers as fast as expected. Today's results were the flip side of AT&T's success yesterday - the launch of the iPhone 4, exclusive to Apple . Verizon reported a net addition of 584,000 contract customers, fewer than expected and fewer than AT&T's(T) net addition of 745,000 customers. Despite not having the iPhone, thanks to the successful Android launch, Verizon is still the nation's largest wireless carrier with 93.2 million customers.
Excluding one-time charges Verizon earned 56 cents per share, beating Wall Street expectations by 2 cents a share. Operating revenue fell 3 percent to $26.5 billion, though it was still a hair more than analysts expected. Verizon is earning more per subscriber -- monthly data revenue per user rose 17.6 percent to $18.20, with some of the highest margins in the industry.
Bernstein Research analyst Craig Moffett issued a report titled "A Glimpse into Live after FiOS" that shines the spotlight on Verizon's wireline business. Despite all the attention on smartphones, Moffett wisely reminds readers that Vodafone owns 45 percent of Verizon Wireless, so investors in Verizon should pay close attention to the wireline business. The enterprise business is recovering - down just .8 percent after dropping 6.2 percent a year ago. The rest of the wireline business saw revenue drop 5.2 percent, the steepest decline in almost two years. Moffett also warns that FiOS expansion "has slowed to a crawl."
The outlook for the rest of the year is improving, much like it is at AT&T: Verizon says earnings in the second half of the year will be 5 to 10 percent higher over the first half of the year. But Verizon's CFO said the wireless units would add 550,000 to 600,000 net new monthly bill paying subscribers in the current quarter. A year ago it added 1.2 million subscribers, so Wall Street see that target as a disappointment, especially since the fourth quarter is traditionally strong.
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