TBO.com - TBO is Tampa Bay Online

Verizon Earnings Rise 12% As Landlines Disconnected

ADVERTISEMENT

The Associated Press

The Tampa Tribune

Published: July 29, 2008

NEW YORK - Verizon Communications' second-quarter earnings rose 12 percent, the company said Monday, while revenue was slightly shy of expectations and customers disconnected their landlines faster than before.

The nation's second-largest telecommunications company earned $1.88 billion, or 66 cents per share, in the quarter ended June 30, up from $1.68 billion, or 58 cents per share, a year ago.

Verizon said that excluding a merger-related item, it earned 67 cents a share, beating the average estimate of analysts polled by Thomson Financial by 2 cents.

Revenue rose 3.7 percent to $24.1 billion from $23.27 billion a year ago. Thomson says analysts expected $24.2 billion.

Verizon shares fell 85 cents, or about 2.5 percent, to $33.60 Monday.

Investors had been expecting the weak economy to catch up to the big telecommunications companies in the second quarter. AT&T's report last week showed that customers were quicker to move to wireless and cable telephone, but the company otherwise did better than expected.

Verizon lost 11.4 percent of its residential landlines in the past year, up from a 10.9 percent decline in the first quarter. But the second quarter is usually a poor one for landlines, said Verizon Chief Financial Officer Doreen Toben.

"I'd say we haven't seen any substantial change in trends," she said.

Verizon's local-phone service areas, concentrated in the Northeast, haven't been hit as hard by the decline of the real estate market as AT&T, which spans Florida and the Midwest. But Verizon is feeling the heat from cable companies, which now offer phone service in nearly their entire service areas.

"It's very stiff competition that we're receiving from cable," said Verizon's chief operating officer, Denny Strigl.

Analysts were mixed on the landline results, but uniformly disappointed by the results in broadband. For the first time, Verizon also reported a drop in the number of DSL subscribers, as customers moved to its fiber-optic service, Fios, where it is available. It lost 133,000 DSL lines while adding 187,000 Fios Internet customers.

Craig Moffett, an analyst at Sanford Bernstein, said it was "a remarkable turn of events" that DSL, which is the only broadband offering in two-thirds of Verizon's local-phone service area, is shrinking.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT