Verizon Earnings Climb 17% on Customer Data Demand
Verizon Communications (NYSE: VZ), the second largest phone company, increase first-quarter earnings 17% from the year earlier period as sales of the iPhone and other smart phones increased data and wireless revenue.
Verizon earned $1.69 billion, or 59 cents per share. Analysts surveyed by Bloomberg projected earnings of 58 cents and sales of $28.1 billion, which the New York-based cell phone provider topped by $100,000. Last year the company earned 51 cents per share.
“Verizon Wireless produced both great growth and great margins, and we produced another strong quarter of Fios growth,” said Verizon Chairman and CEO Lowell McAdam in a statement released this morning.
Verizon added 193,000 FiOS internet connections and 104,000 new broadband connections in the quarter. The 8.8 million broadband connections at the end of the quarter is a 3.3% year-over-year increase.
The company's retail postpaid customers, customers who receive a bill after using the cell phone carrier's services, continued to transition to smart phones as 47% of the 88.0 million customers used the high-data phones compared to 43.5% at the end of last quarter. Verizon also added about 501,000 postpaid customers in the quarter, besting the 497,285 estimate of analysts surveyed by Bloomberg.
The transition drove data revenue up 21.1% year-over-year for the carrier, to $6.6 billion.
Holiday sales of the Apple (Nasdaq: APPL) iPhone 4S began to boost Verizon's revenue as subscribers started paying their bills. The cell phone provider originally sold the iPhone 4S at a loss to compete with AT&T and Sprint Nextel (NYSE: S), which also use promotions and the iPhone to sell contracts.
Smart phone users pay for more expensive data packages than regular phone users and increased average monthly contract revenue to $55.43 at Verizon, topping the $54.41 predicted by analysts surveyed by Bloomberg.
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