If Vodafone’s earnings today underscored the pressure on operators to move on from their traditional lines of business, then Verizon’s earnings demonstrate the benefits of what happens when they do. The operator today reported earnings that topped expectations, citing strong takeup of 4G/LTE services as one of the key drivers. At the same time, the operator has finally elevated Lowell McAdam to the position of CEO, replacing Ivan Seidenberg, who will remain as chairman.
Verizon’s net income was $1.61 billion, a huge turnaround from its loss of $1.19 billion the same quarter one year ago.
In the process it picked up an addition 1.3 million contract customers, easily beating expectations from analysts polled by Bloomberg, who estimate 948,000 new contract customers. Total revenues were $27.5 billion.
The company sold 1.2 million 4G LTE smartphones and data devices. Verizon Wireless (NYSE: VZ) 4G LTE service is available in 102 markets across the U.S., covering a population of more than 160 million. By year-end, it expects the network will be available in more than 175 markets across the country, covering a population of more than 185 million.
The numbers show how Verizon is driving this business aggressively, both in terms of new markets and devices being added to the network. The company introduced three 4G LTE devices: the Droid Charge by Samsung, Revolution by LG (SEO: 066570) and the MiFi 4510L 4G LTE Mobile Hotspot by Novatel Wireless. Later this month, the latest LTE device, the Samsung Galaxy Tab 10.1, is expected to hit the shelves.
Other highlights from the quarter:
– In the wireline area, Verizon’s April acquisition of cloud and managed IT infrastructure provider Terremark contributed $98 million in revenue.
– Revenues for Verizon’s FiOS services generated approximately 57 percent of consumer wireline revenues, compared to 48 percent a year ago.
– Consumer revenues grew 1.3 percent as the amount of revenue generated per subscriber to its wireline services was $92.44 was up 9.4 percent compared with second-quarter 2010. ARPU for FiOS customers continues to be more than $146.
– Although no mention was made of Apple (NSDQ: AAPL) or iPhone in the earnings release, Q2 was the first full quarter where Verizon shared the rights to sell the device along with AT&T (NYSE: T). Verizon Wireless added 2.2 million total connections, including 1.3 million retail postpaid customer. It ended the quarter with 106.3 million total connections, an increase of 6.6 percent year over year.