Verizon reports double-digit earnings growth in 2013 third quarter

Oct. 22, 2013
Verizon Communications Inc. (NYSE, NASDAQ: VZ) revealed last week that third quarter of 2013 marked the third consecutive quarter that both operating income and earnings per share (EPS) rose by double digits. Success in its Verizon Wireless, FiOS, and strategic enterprise services led the way, according to the company.

Verizon Communications Inc. (NYSE, NASDAQ: VZ) revealed last week that third quarter of 2013 marked the third consecutive quarter that both operating income and earnings per share (EPS) rose by double digits. Success in its Verizon Wireless, FiOS, and strategic enterprise services led the way, according to the company.

The third quarter’s $0.78 EPS handily exceeded the $0.56 per share reported in 3Q12. The more recent figure includes a non-operational gain of $0.02 per share related to the sale of wireless spectrum, partially offset by $0.01 per share in incremental interest expense related to the financing of Verizon’s planned purchase of Vodafone Group PLC’s 45% stake in Verizon Wireless. djusted third-quarter 2013 earnings of $0.77 per share increased 20.3% OVER an adjusted $0.64 per share in the year-ago quarter, which excluded $0.08 per share in charges related to patent-litigation settlements.

Third quarter operating income rose 30.0%, to $7.1 billion, versus $5.5 billion in third-quarter 2012. Operating income margin was 23.5% in 3Q13, compared with 18.9% in the year-ago quarter.

Verizon achieved these figures on total operating revenues of $30.3 billion, a 4.4% improvement over 3Q12. The quarter was the fourth in succession to see year-over-year revenue growth of more than 4%, the carrier said. Verizon Wireless, FiOS, and strategic enterprise services accounted for 84% of revenues for the quarter.

Looking at the wireline segment, consumer revenues were $3.7 billion, up 4.3% versus the year-ago quarter. This marks the fifth consecutive quarter of 4% year-on-year growth, Verizon says. Consumer ARPU for wireline services rose to $112.86, up 8.7% year-on-year. Wireline operating income margin was 1.6%, up 120 basis points over third-quarter 2012.

FiOS revenues increased 13.4% to $2.8 billion, versus $2.5 billion in 3Q12. Verizon said it added 173,000 net new FiOS Internet connections, up 27.2% from third-quarter 2012, and 135,000 net new FiOS Video connections, up 13.4 percent. Verizon had a total of 5.9 million FiOS Internet and 5.2 million FiOS Video connections at the end of the quarter, representing year-over-year increases of 12.6% for each.

Meanwhile, FiOS Internet penetration reached 39.2% at the end of the recent quarter, versus 37.0% at the end of third quarter 2012. FiOS Video penetration was 34.9%, compared with 32.9% in the year ago quarter. The FiOS network passed 18.3 million premises by the end of third quarter 2013, Verizon said.

More than 40% of FiOS Internet customers subscribed to FiOS Quantum, which provides speeds ranging from 50 to 500 Mbps, up from 35% at the end of 2Q12.

Total broadband connections reached nearly 9.0 million at the end of the quarter, up 2.6% year-over-year. Overall, net broadband customers increased 56,000 in the third quarter, as FiOS Internet net customer additions more than offset a decline in DSL subscribers. Along these lines, Verizon reported that through the first nine months of 2013 it had migrated nearly 250,000 homes to from copper to fiber to the home (FTTH) and is on track to exceed its target of 300,000 migrations within FiOS markets in 2013. By year-end 2013, Verizon projects it will have less than 1 million remaining customers served by copper in FiOS markets.

“These strong third-quarter results reflect Verizon’s long-term investment in reliable, high-quality networks to deliver value to customers,” said Lowell McAdam, Verizon chairman and CEO. “Our unwavering focus on wireless, FiOS and strategic enterprise services has produced consistent performance, and we’ve delivered double-digit earnings growth in six of the past seven quarters. Verizon’s strategic networks form a powerful distribution platform for future growth and innovation.”

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