Verizon

(VZ) - Get Verizon Communications Inc. Report

, the nation's No. 1 local phone service company, beat Wall Street's first-quarter earnings estimates by a penny Tuesday after the market closed. But not all the news was good for telecom investors.

Lucent's Still Standing. Yeah, Yeah, Yeah

Bad News Piles Up as JDS Sets More Firings

'Dismal' Conference Call Has Nortel Providing Few Answers

Financing Risk Looms Despite Cisco's Cautious Stance

Street Pushes Ciena, but Spending Pullback Quiets Even a Bull

Sycamore's Inventory Writedown Writes Script for Networkers

Sector Spotlight: Debt Comes Knocking at Telecom's Door

More III Winds for Networkers as Even Hearty SBC Cuts Back

The Cisco Conundrum: Nearly 80% of Big-Cap Growth Funds Are Still Holding the Bag

Citing strong sales in data services to business along with wireless growth, the New York-based company said earnings jumped to 72 cents a share, from 69 cents a year ago, on revenue of $2 billion, up from the year-ago $1.9 billion.

Though the company said it was firing on all cylinders, it chopped $1 billion from its annual capital budget, bringing projected spending on network equipment to $17.5 billion. Verizon is only the most recent Baby Bell to trim its spending:

Qwest

(Q)

said Tuesday it would cut its spending by $300 million, to $9.2 billion, and

SBC

(SBC)

said Monday it

would trim spending by $500 million.

TheStreet Recommends

Verizon's move continues the pullback that has fed sales declines and job losses across the equipment-selling sector. The rebound of networking outfits like

Lucent

(LU)

and

Nortel

(NT)

relies on generous spending by the Baby Bells, which account for much of the gear market. Verizon said three-quarters of its spending cutback would come from buying less gear and the remaining quarter from the lower prices that sales-starved networkers are throwing at potential buyers.

Verizon said its strong first quarter puts it on target to meet the 8% year-over-year growth target it set at the outset of 2001. The company said full-year profits would be in the range of $3.13-$3.17 per share.

Long distance sales continue to drive Verizon's moderate growth. The company now ranks as the nation's No. 4 long distance carrier and says it now has more long distance customers in New York than

Sprint

undefined

.

Last week, Verizon gained regulatory approval to offer long distance service in Massachusetts. Verizon says it expects to end the year with 6.5 million long distance customers.

Due to a quiet period related to the registration of Verizon's wireless business for IPO, the company declined to offer wireless growth forecasts.