Wireless, FiOS lead to ‘strong’ second quarter performance for Verizon

As was the case with AT&T the day before (see “Wireless gains highlight AT&T second-quarter 2011 results”), Verizon Communications Inc. (NYSE, NASDAQ:VZ) today reported that its wireless and next-generation broadband services sparked revenue growth in the second quarter of 2011. Verizon reported 57 cents in earnings per share for the quarter, compared with a second-quarter 2010 loss of 42 cents per share.

On a consolidated basis, Verizon's total operating revenues were $27.5 billion in second-quarter 2011, up 2.8 percent year on year. Second quarter 2010 revenue numbers benefited from operations that have since been divested, Verizon pointed out.

"In terms of earnings growth and the acceleration of revenue growth, this has been one of Verizon's best quarters since the 2008 economic downturn," said Chairman and CEO Ivan Seidenberg, who will relinquish the second of those two titles August 1 (see “Lowell McAdam to replace Ivan Seidenberg as Verizon CEO”). "We expanded sequential margins in both our wireline and wireless businesses, and in the second half of the year we expect Verizon to build on this strong, positive momentum to continue to drive profitable, sustainable growth."

Verizon continues to expect full-year 2011 capital spending to be similar to its 2010 investment of $16.5 billion.

On the wireless end of the business, service revenues in the quarter hit $14.7 billion, up 6.6 percent year over year. Data revenues were $5.8 billion, up $1.1 billion (22.2 percent) year over year; data represented 39.5 percent of all service revenues in the quarter. Total wireless revenues were $17.3 billion, up 10.2 percent year over year.

Meanwhile Verizon's wireline business saw operating revenues of $10.2 billion, a decline of 0.3 percent compared with the year ago quarter but an improvement over a shortfall of 2.2 percent in first-quarter 2011 revenues compared to first-quarter 2010 earnings. Newly acquired Terremark Worldwide contributed $98 million in revenue, representing 100 basis points of wireline revenue growth, in second-quarter 2011.

Revenues for Verizon's FiOS consumer retail FTTH services generated approximately 57 percent of consumer wireline revenues in second-quarter 2011, compared with approximately 48 percent in second-quarter 2010. Consumer revenues overall grew 1.3 percent compared with second-quarter 2010. Consumer ARPU for wireline services was $92.44 in second-quarter 2011, up 9.4 percent compared with second-quarter 2010. ARPU for FiOS customers remained more than $146, Verizon stated.

Verizon added 189,000 net new FiOS Internet connections and 184,000 net new FiOS TV connections in second-quarter 2011. Verizon had a total of 4.5 million FiOS Internet and 3.8 million FiOS TV connections at the end of the quarter.

FiOS penetration stands at 30 percent or more for both services, Verizon asserted. FiOS Internet penetration was 34 percent at the end of second- quarter, while FiOS TV penetration was 30 percent. Verizon’s FiOS network passed 16.1 million premises at mid-year 2011, the company said.

Broadband connections totaled 8.6 million at the end of second-quarter 2011, a 3.3 percent year-over-year increase. FiOS Internet connections offset a decrease in DSL-based Internet connections, resulting in a net increase of 62,000 broadband connections from first-quarter 2011.