By Ben Fox Rubin
Verizon Communications Inc. said its profit more than doubled
for the first three months of the year, as the telecommunications
giant got a big boost from its recent Verizon Wireless acquisition
and continued to increase its base of wireless and Internet
customers.
The company in late February completed its deal to gain full
ownership of Verizon Wireless, buying Vodafone Group PLC's 45%
stake in the wireless carrier for $130 billion. The acquisition is
expected to sharply increase Verizon's profits through 2014 and
will grant Verizon more flexibility in driving Verizon Wireless's
future. Verizon has said it is now looking to focus on smartphone
penetration and connected devices, such as cars and tablets, to
boost Verizon Wireless sales.
Verizon posted a profit of $3.95 billion, or $1.15 a share, up
from $1.95 billion, or 68 cents a share, a year earlier. Adjusted
earnings were 84 cents a share in the latest period. Verizon said
adjusted earnings would have been 91 cents a share if it had full
control of Verizon Wireless for the whole quarter.
Revenue improved 4.8% to $30.8 billion.
Wall Street analysts on average expected a profit of 87 cents a
share and revenue of $30.7 billion, according to Thomson
Reuters.
Wireless providers are expecting to spend billions of dollars in
upcoming years in government-run wireless spectrum auctions as they
seek to beef up their networks. Verizon and AT&T Inc., the two
largest U.S. wireless providers, may face limits to how much
spectrum they are allowed to purchase, though, as government
regulators try to keep smaller providers T-Mobile US Inc. and
Sprint Corp. competitive against their larger rivals.
Verizon Wireless added 539,000 of the most profitable postpaid
subscribers, compared with 677,000 additions a year earlier. At the
end of the quarter, the company had 103.3 million retail wireless
customers, up 4.4% from a year ago.
Earlier this week, AT&T said it added 625,000 postpaid
customers during the period, its highest first-quarter total in
five years.
Verizon's wireless revenue rose 6.9% to $20.9 billion. Total
postpaid churn, or customers who cancel services, was 1.07%,
compared with 1.01% a year earlier.
In its FiOS business, which provides Internet and video services
for residential and business customers, the company added 98,000
Internet and 57,000 video subscribers during the quarter.
Write to Ben Fox Rubin at ben.rubin@wsj.com
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