Business

Verizon Revenue Down on Sale of Assets

Verizon Communications on Friday reported revenue of US$26.5 billion for the third quarter of 2010, down 2.9 percent from a year earlier, with the drop largely due to a loss of revenue from sold operations.

Verizon reported a slight increase in net income, from $2.89 billion in the third quarter of 2009, to $2.92 billion in the quarter ending this Sept. 30. On a comparable basis, revenue increased by 2.1 percent over the third quarter of 2009, Verizon said in a news release.

In May 2009, Verizon announced a $8.5 billion deal to sell off its DSL and land-line assets in 14 states to Frontier Communications.

Verizon's earnings per share for the quarter was $0.56, excluding one-time items. Analysts polled by Thomson Financial expected earnings per share of $0.54.

Including one-time charges, Verizon's profit was $881 million, down from $1.78 billion in the year-earlier period.

Verizon Chairman and CEO Ivan Seidenberg called the quarterly results strong. "We are building momentum and are on track to achieve our goal of growing earnings in the second half of the year," he said in a statement. "We are excited by the opportunities we see to expand wireline margins and the growth we see related to the upcoming launch of next-generation wireless services."

Verizon's mobile revenue was $16.3 billion for the third quarter, up from $15.3 billion in the third quarter of 2009. The company added nearly 1 million retail and reseller mobile customers during the quarter, bringing its total number of mobile customers to 93.2 million, not including 7.9 million other connections, including telematics.

New models of mobile devices, including the Apple iPad WiFi, will be available during the fourth quarter, Verizon said.

The company's wireline revenue dipped from $10.7 billion to $10.3 billion. But Verizon pointed to increases in Fios broadband and television customers as a positive development. The company added 226,000 Fios broadband customers and 204,000 Fios TV customers during the quarter, the largest quarterly increase in Fios customers in more than a year.

Verizon now has 3.9 million Fios broadband customers and 3.3 million Fios TV customers. Wireline broadband and video revenue, including the Fios services and DSL, were $1.8 billion for the quarter, up 20.8 percent from the third quarter of 2009.

Jeff Kagan, an independent telecom analyst, said Verizon's quarterly report showed some "troublesome signs."

Verizon's mobile division added about 161,000 fewer customers than rival AT&T did during the quarter, Kagan noted in an e-mail.

"The wireless market remains fast growing and strong for the companies who offer what customers want," he said. "Its all about the smart phone right now. AT&T smart phone sales are at the 53 percent level while Verizon's are at the 37 percent level."

AT&T's smartphone sales have been largely driven by sales of Apple's iPhone, for which AT&T has an exclusive contract in the U.S.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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