Verizon Communications (NYSE: VZ) reported third quarter earnings today of $1.67 billion or $0.59 diluted earnings per share on $24.7 billion in revenue. Net income was up 31 percent. Adjusted earnings per share were $0.66. Revenue was up 4.1 percent year on year, just above a poll of analysts by Thomson Reuters (NASDAQ: TRIN) which had forecast revenue of $24.5 billion. The second largest telecommunications company behind AT&T (NYSE: T) wireless unit posted better than expected earnings–especially in light of AT&T’s boost from the iPhone–but the wireline business is still falling.
Earnings Highlights:
Wireless:
— Net customer additions up: Verizon’s wireless unit pulled in 1.5 million net customer additions, or 2.1 million total retail net additions including 630,000 customers from its Rural Cellular Corp. acquisition. (Verizon expects to have a net loss of approximately 120,000 of these customers under an exchange agreement with another carrier.) The carrier now has 70.8 million total customers, or 68.8 million retail customers, up 11.3 percent.
— Revenues up: Total revenues were up 12.5 percent to $12.7 billion. Total service revenue was $10.9 billion, boosted by strong growth in data revenues. Data revenues, which now make up 25.5 percent of all service revenue climbed 42.5 percent to $2.8 billion.
— Churn up: Verizon has had four straight quarters of smaller and smaller churn, but this quarter, perhaps thanks to the iPhone, total churn was up to 1.33 percent, compared to 1.12 percent sequentially, and to 1.27 percent year on year. Churn was 1.03 percent in retail post-paid churn, also up from .83 percent from Q2, and from .96 percent in 3Q2007
— Total ARPU stable; data ARPU up: Total service ARPU was up 0.9 percent to $52.18 year over year, boosted in part by total data ARPU, which was up 28.3 percent. Data ARPU is now $13.30.
Wireline
— FiOS TV/ FiOS Internet: Verizon reported 233,000 net new FiOS TV customers and 225,000 net new FiOS Internet customers. The company now has 1.6 million FIOS TV customers and 2.2 million FiOS Internet customers.
— Wireline operating revenues down: Wireline total operating revenues were $12.2 billion, 1.7 percent down compared with the third quarter 2007. Wireline data revenues which now represent 42.9 percent of total Wireline revenues — were $5.2 billion, an increase of 14.6 percent compared with the third quarter 2007. This includes revenues from consumer broadband services, wholesale data transport and Verizon Business data services.
— Consumer ARPU up: Consumer ARPU in legacy telecom markets was up 12.8 percent to $66.67. Consumer revenue was up 2.1 percent to $3.8 billion, while consumer broadband and video revenues grew 45 percent to $1.1 billion.
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