Telecommunications giant Verizon Communications Inc. (VZ: Quote) on Thursday reported a 23 percent increase in profit for the second quarter as the company recorded higher revenues and subscriber additions in its wireless segment. Adjusted earnings per share for the quarter beat analysts' estimates by a penny, while revenues slightly missed their expectations.
Lowell McAdam, Verizon chairman and CEO said, "Verizon's consistent strategic investments in wireless, FiOS and global networks drove strong financial performance in the first half of 2013. Having posted double-digit earnings growth in five of the last six quarters, we are focused on continuing to provide the best portfolio of products on the most reliable networks; capturing incremental revenue growth in broadband, video and cloud services; and sustaining our earnings and cash-flow momentum."
Net income attributable to Verizon for the second quarter rose to $2.25 billion or $0.78 per share from $1.83 billion or $0.64 per share in the year-ago period. The latest quarter's results included a non-cash, non-operational gain of $0.05 per share for an interim actuarial remeasurement associated with one of Verizon's pension plans.
Adjusted earnings for the quarter were $0.73 per share, compared to $0.64 per share in the same period last year. On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.72 per share for the quarter. Analysts' estimates typically exclude special items.
Operating revenues for the quarter grew 4 percent to $29.79 billion from $28.55 billion in the prior year quarter. Analysts had consensus revenue estimate of $29.83 billion.
Operating income margin rose to 22 percent from 19.8 percent in the same period last year.
Verizon's wireless revenues for the quarter increased 8 percent to $19.98 billion. Of this, service revenues increased 8 percent to $17.08 billion.
The wireless division added 941,000 net new retail postpaid subscribers in the quarter, up 6 percent over the same period last year.
Verizon Wireless had total retail connections of 100.12 million at the end of the quarter, up 6 percent year-over-year and including 94.27 million retail postpaid connections.
Meanwhile, Verizon's wireline revenue for the quarter declined 2 percent from the year-ago period to $9.73 billion. However, consumer revenues increased 5 percent to $3.64 billion.
FiOS revenues grew 15 percent year-over-year to $2.73 billion. The company added 140,000 net new FiOS video connections, 161,000 net new FiOS Internet connections and 286,000 net new FiOS digital voice residence connections in the latest quarter.
The company served 5.77 million FiOS Internet connections and 5.04 million FiOS video connections by the end of the quarter, representing year-over-year increases of 12 percent and 13 percent respectively.
As of the end of the second quarter, Verizon Wireless has substantially completed deployment of its 4G LTE network, covering more than 99 percent of its current 3G network footprint.
Looking ahead to fiscal 2013, Verizon increased its capital spending guidance to between $16.4 billion and $16.6 billion from the prior guidance of $16.2 billion as the company anticipates higher demand for wireless data consumption and also begins deployment of AWS or advanced wireless services spectrum in the second-half of the year.
VZ closed Wednesday's trading at $50.74. In Thursday's pre-market, the stock is down $0.64 or 1.26 percent to $50.10.
by RTT Staff Writer
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