Verizon profit, subscribers beat Wall Street view

Reuters News
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Posted: Jul 22, 2011 10:03 AM
Verizon profit, subscribers beat Wall Street view

By Sinead Carew

NEW YORK (Reuters) - Verizon Communications's second-quarter profit topped Wall Street estimates as it added more subscribers than expected in its first full quarter selling the Apple Inc iPhone.

Verizon Wireless, owned by Verizon and Vodafone Group Plc, added 1.3 million net subscribers in the quarter compared with the average expectation for about 930,000, according to seven analysts contacted by Reuters.

Verizon shares fell nearly 1 percent to $37.24 in premarket trading.

Verizon activated 2.3 million iPhones in the quarter compared with 3.6 million at AT&T.

But Stifel Nicolaus Chris King was impressed with Verizon's sale of 1.2 million high-speed wireless devices for a new network it is building.

"I don't see anything in there that should be disappointing," he said.

While some investors had worried that the relatively expensive iPhone would hurt Verizon's profit margins, King said its wireless service margin of 45.4 percent was well ahead of his expectation for 43.9 percent.

Verizon's quarterly profit was $1.61 billion, or 57 cents a share, compared with a loss of $1.19 billion, or 42 cents a share, a year ago. This was ahead of the average analyst expectation for earnings per share of 55 cents, according to Thomson Reuters I/B/E/S.

Revenue increased 2.8 percent to $27.53 billion and was ahead of Wall Street expectations for $27.42 billion.

The company named Chief Operating Officer Lowell McAdam as its new chief executive, replacing Ivan Seidenberg, who is retiring from that role but remaining as chairman. It had announced the succession plan late last year.

(Reporting by Supantha Mukherjee in Bangalore and Sinead Carew in New York; Editing by Joyjeet Das and Derek Caney)