11:38 AM

Verizon's Earnings Jump Thanks To Wireless Growth

Verizon Wireless unit recorded 1.5 million net customer additions, and Verizon's FiOS TV service signed up 263,000 net new customers.

Verizon Communications' focus on its leading-edge technologies in wireless and fiber was largely responsible for a rise of nearly 10% in its first-quarter earnings, the company announced Monday.

Verizon said its Verizon Wireless unit recorded 1.5 million net customer additions, and that 263,000 net new customers signed up for its FiOS TV service. Verizon Wireless now has 67.2 million customers, while the new FiOS service has a total of 1.2 million customers.

The nation's second-largest telecommunications company -- AT&T is the largest -- posted the strong financial performance in the face of widespread fears the United States is in, or entering, a recession. Verizon's income grew to $1.64 billion on revenue of $23.8 billion.

"Verizon has weathered the current economic uncertainty with strong first-quarter results," said chairman and CEO Ivan Seidenberg in a statement. "I am also confident of our position over the long term because we have further opportunities to drive revenue growth and further opportunities to eliminate costs."

As in recent quarters, Verizon Wireless, which Verizon Communications owns jointly with Vodafone Group, highlighted the financial report. Revenue at the unit increased 13.2% to $11.7 billion, and the wireless operating margin was 27.9%. The company noted that it was the leading acquirer of 700 MHz licenses in the recent FCC auction. Verizon Wireless paid $9.36 billion for the licenses, which will help the company roll out a faster LTE wireless infrastructure in 2010.

Verizon said data revenue in the wireless unit was up 48.9% over the previous year's figure to $2.3 billion.

Wireline revenue declined slightly to $12.3 billion, a drop of 1.4% compared with last year's first quarter. As many subscribers drop their old wireline phones in favor of cell phones, Verizon and AT&T have been trying to make up the difference with new efforts in fiber-based services. Verizon said its FiOS high-speed Internet and TV services passed 10.4 million premises at the end of the quarter.

Verizon noted that it will launch a major effort in New York City, where it has filed for a video franchise permit to cover more than 3 million homes.

While Verizon has been stepping up its efforts to grow its high-end technology services that promise more lucrative profits, the former Baby Bell has been selling off some of its older landline operations that operate primarily in rural areas. At the end of the quarter, it disposed of landline operations in Maine, New Hampshire, and Vermont in a sale to FairPoint Communications. Before that, it sold a landline operation in Hawaii.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
InformationWeek Elite 100
InformationWeek Elite 100
Our data shows these innovators using digital technology in two key areas: providing better products and cutting costs. Almost half of them expect to introduce a new IT-led product this year, and 46% are using technology to make business processes more efficient.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends to Watch in Financial Services
IT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of July 17, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.