Verizon Adds Customers; Profit Rises 10%

By Peter Svensson
Associated Press
Tuesday, April 29, 2008

NEW YORK, April 28 -- Verizon Communications on Monday reported steady earnings in a stormy economy.

The country's second-largest telecommunications company said first-quarter profit rose 9.8 percent as its wireless division signed up more customers than rival carriers did.

Verizon had a profit of $1.64 billion (57 cents a share) in the quarter ended March 31, compared with $1.5 billion (51 cents) in the corresponding period a year earlier.

Revenue rose 5.5 percent, to $23.8 billion, from $22.6 billion.

Excluding one-time items, profit was 61 cents a share, matching expectations of analysts polled by Thomson Financial. Revenue fell slightly short of analysts' expectations of $23.86 billion.

"Verizon has weathered the current economic uncertainty with strong first-quarter results," said Ivan Seidenberg, chairman and chief executive.

Analysts have been looking to telecommunications companies to hold up well, even as the economy slows. AT&T, Verizon's largest rival, reported earnings last week that showed little sign of trouble.

Stifel Nicolaus analyst Christopher King upgraded Verizon to "buy" from "hold" after the report, noting the stock's 4.6 percent dividend yield and its growth prospects in wireless and fiber-optic services.

Shares rose 91 cents, or 2.5 percent, to $37.95 Monday.

On a conference call Monday, Verizon Chief Financial Officer Doreen Toben said that bad customer debt on the landline side had actually improved from last year and that wireless accounts had stabilized.

UBS analyst John Hodulik said that wireless results were strong but that the landline business was somewhat lower than expected.

Verizon Wireless added 1.5 million subscribers, beating AT&T, which added 1.3 million in the quarter. However, its growth fell from 1.7 million in the corresponding quarter a year earlier. Verizon Wireless still trails AT&T in the total number of subscribers, at 67.2 million compared with 71.4 million.

© 2008 The Washington Post Company