Today's Outrage: Verizon Makes Sour Lemonade

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NEW YORK ( TheStreet) -- No matter how you slice the lemons, Verizon's ( VZ) second-quarter results are pretty sour.

The telecom company tried to make lemonade by focusing on revenue growth and improved cash flow in its earnings release this morning and downplaying a 21% decline in directly attributable profit.

It's hard to get excited about growing revenue when profit is shrinking.

For those who insist on looking on the bright side, stripping out merger costs and one-time items related to severance packages and pension settlements, Verizon's profit only fell 5.6%. That's still a decline, though a little better than analysts had expected.

Look a little deeper at the revenue growth, though, and there are more disappointments. It turns out that a big chunk of the 11.3% gain stems from the acquisition of Alltel. Strip that out and the increase fades to 1.9%.

On the wireless front, Verizon touts "solid net customer additions" of 1.1 million retail customers. That would be more impressive if arch-rival AT&T ( T) hadn't reported a net gain of 1.4 million new customers last week.

The all-important ARPU (average revenue per user on a monthly basis) dropped 0.8% for Verizon's services and gained 18.9% for data. Don't be too impressed with the growth in data since the company generates more than three times as much revenue from services.

Verizon continues to thump its corporate chest over its FiOS TV and Internet service, with Chairman and CEO Ivan Siedenberg proudly proclaiming that the company achieved "new levels of sales success."

That translated into an additional 300,000 FiOS TV customers and 303,000 Internet clients, for a whopping total of 5.6 million subscribers to FiOS.

That poor cable guy you see in the commercials only has 46.2 million customers at Comcast ( CMCSA) and 34.2 million at Time Warner Cable ( TWC), the two biggest cable companies.

It seems the cable guy is a little busier than Verizon wants you to think.

While Verizon is doing many things right, there's clearly much work that still needs to be done. Right now, we're seeing the pain more than the gain.

There's just not enough sugar in the second-quarter numbers to make good lemonade.

-- Written by Glenn Hall in New York. Feedback can be sent to glenn.hall@thestreet.com

Glenn Hall is the New York-based editor of TheStreet.com. Previously, he served as deputy editor and chief innovation officer at The Orange County Register and as a news manager at Bloomberg News in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at The Journal-Gazette in Fort Wayne, Ind. His work also has been published in a variety of newspapers including The Wall Street Journal, The New York Times and International Herald Tribune. Hall received a bachelor's degree in journalism and political science from The Ohio State University and a certificate in project and program management from Boston University.

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