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Verizon Sees Revenue Rise, Profit Fall

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By PETER SVENSSON, The Associated Press

Published: October 30, 2007

NEW YORK - Verizon Communications on Monday reported third-quarter earnings that were largely in line with expectations, reflecting steady growth in its wireless operations and a slow decline in its wired telephone business.

The nation's second-largest telecommunications company earned $1.27 billion, or 44 cents per share, in the July-September period, down 34 percent from $1.92 billion, or 66 cents per share, a year earlier.

Revenue came to $23.8 billion in the latest quarter, up 5.8 percent from $22.5 billion a year ago.

Excluding one-time charges, earnings would have been 63 cents per share. That compares with 53 cents per share in the same period last year, excluding the high-margin Yellow Pages business and other operations that have since been sold off.

On that basis, the latest earnings beat the average estimate of analysts polled by Thomson Financial by a penny a share. Wall Street was expecting revenue of $23.7 billion.

Verizon shares rose 39 cents to close at $45.99 in Monday trading. The stock has risen steadily from a 52-week low of $33.98 set last November as investors have gotten over their skepticism of Verizon's $23 billion fiber-optic buildout plan.

Verizon's major growth driver, cell phone operations, added 1.6 million customers for a total of 63.7 million, just behind AT&T's 65.7 million. Although Verizon has been closing the gap with AT&T, Verizon's rival pulled ahead this quarter with an assist from Apple's iPhone, for which it is the exclusive carrier.

Verizon Chief Operating Officer Denny Strigl said the iPhone has had 'minimal impact,' but acknowledged two brief jumps in customers applying to have their numbers transferred to another carrier. The first was when the iPhone went on sale in the previous quarter. The second occurred when the iPhone's price was lowered in September.

'We have a very aggressive fourth-quarter plan in terms of introduction of new products' Strigl said. The new phones include the LG Voyager, which like the iPhone has a large touch-sensitive screen. Strigl said it was 'a very close competitive offer to the iPhone.'

Verizon Wireless is a joint venture of Verizon and Vodafone Group of Britain. All of its revenue is counted on Verizon's books, but only 55 percent of its profits, with the rest going to Vodafone.

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