Wireless Gains Boost Verizon

This article was updated with a new stock price from 7:43 a.m. EDT.

Verizon (VZ Quote) matched second-quarter estimates, as wireless revenue jumped 17% from a year ago.

The New York telco made $1.68 billion, or 58 cents a share, for the quarter ended June 30, up from the year-ago continuing operations profit of $1.26 billion, or 43 cents a share. Revenue rose 6% from a year ago to $23.3 billion.

Analysts surveyed by Thomson Financial were looking for a 58-cent profit on sales of $23 billion.

"Verizon's strategy of focusing on organic revenue growth and improving margins continues to gain momentum," said CEO Ivan Seidenberg. "Results show that we are producing accelerating -- and sustainable -- top- line growth across all key markets.

"Verizon is also generating strong operating cash flows, which we expect to improve throughout the year. With our strong balance sheet and investment in advanced network platforms, we can continue to drive future earnings growth and return value to shareholders. We are confident we have the products and services, distribution infrastructure and customer service capabilities to continue to capture share from the competition in strategic markets."

Verizon Wireless, the company's joint venture with Vodafone (VOD Quote), posted revenue of $10.8 billion while adding 1.6 million retail customers. The company added 1.3 million net customers after about 300,000 net reductions to the company's wholesale base -- primarily due to the bankruptcy of a reseller.

Retail average revenue per user, or ARPU, rose 3% from a year ago to $51.84. Churn was 1.08% for retail customers and 0.85% for the lucrative postpaid customers Wall Street covets.

Verizon Telecom added a net of 167,000 new FiOS TV customers in the second quarter of 2007. Net customer additions averaged about 2,600 per business day in the quarter. The company had a total of 515,000 FiOS TV customers as of the end of the second quarter of 2007 -- an addition of 460,000 FiOS TV customers since the end of the second quarter of 2006.

Complementing the FiOS TV rollout, the company added 125,000 satellite TV customers in partnership with DirecTV(DTV Quote) in the second quarter 2007. At the end of the quarter, Verizon had a total of nearly 1.3 million video customers.

Wireline total operating revenues were $12.6 billion, a 1.1% decrease on an adjusted basis (non-GAAP), compared with second quarter 2006. This was driven in part by a continuation of the expected declines in former MCI operations serving mass market customers, and it is an improvement from the adjusted, pro-forma 6.2% year-over- year decline in the second quarter of 2006. Wireline total operating expenses were $11.5 billion, a 0.4% decrease on an adjusted basis (non-GAAP), compared with second-quarter 2006.

Verizon was recently trading down 75 cents, or 1.79%, to $41.25.