Verizon 1Q profit surges on Vodafone-related gains

AP News
Posted: Apr 24, 2014 10:31 AM
Verizon 1Q profit surges on Vodafone-related gains

NEW YORK (AP) — Verizon's $130 billion deal to take over of all of Verizon Wireless is helping lift its profit.

The largest U.S. cellphone carrier on Thursday posted a 23 percent profit increase in its first quarter, during which it completed the acquisition of the 45 percent stake in its wireless division from British cellphone carrier Vodafone Group PLC.

Verizon is reaping the benefits of higher profits and full access to Verizon Wireless' cash flows now that the deal has closed, said Verizon CFO Francis Shammo on a conference call with investors.

Verizon Communications Inc. said its first-quarter net income rose to $5.99 billion, or $1.15 per share, from $4.86 billion, or 68 cents per share, in the January-March quarter of 2013.

Excluding one-time items, profit came to 84 cents per share in the most recent quarter. Analysts' average estimate was 86 cents per share, according to FactSet.

Revenue rose 5 percent to $30.82 billion from $29.42 billion. Wall Street projected $30.66 billion.

The recent quarter's results included about five weeks of contributions from the Vodafone acquisition.

Total revenue at Verizon's wireless business increased 7 percent to $20.9 billion. The company added a net 549,000 new devices to its network during the recent quarter. Of that, 539,000 were connections that involved monthly service contracts — the high-value, long-term customers.

At the end of the first quarter, Verizon had 103.3 million devices on its network, including 97.3 million involving monthly service contracts, up 4 percent from the year before.

Meanwhile, revenue at the company's arm that provides landlines along with its FIOS internet and TV services rose 6 percent to $3.8 billion, boosted by higher demand for FIOS.

The company added a net 98,000 new FIOS Internet connections and a net 57,000 new FIOS video connections during the first quarter.

As of the end of the period, Verizon had 6.2 million Internet subscribers, up 10 percent from a year ago, and 5.3 million video connections, which rose 9 percent.

Shares of New York-based Verizon fell 73 cents to $46.70 in morning trading.