Verizon Communications Inc. (NYSE, Nasdaq: VZ) says its second quarter of 2013 saw double-digit growth year-on-year, with both consumer wireline and wireless services improving versus the second quarter of 2012. Progress in its controversial copper-to-fiber migration program set up further growth within its FiOS fiber to the home (FTTH) based offering.
Meanwhile, Verizon signaled that it will boost capex this year, from its previously guided $16.2 billion to between $16.4 billion and $16.6 billion.
Total operating revenues for the quarter came in at $29.8 billion, up 4.3% versus second-quarter 2012. Operating income increased to $6.6 billion in second-quarter 2013, 16.0% better than the $5.7 billion recorded in the year-ago quarter. Operating income margin was 22.0% in recently concluded quarter, versus 19.8% in second-quarter 2012.
All this translated into earnings per share of $0.78 cents, also better than the year-ago quarter, when Verizon reported EPS of $0.64 cents. The figure benefited from a non-cash, non-operational gain of $0.05 per share for an interim actuarial remeasurement associated with one of Verizon’s pension plans.
Sequentially, revenues improved by $0.4 billion, while EPS was up $0.10.
Breaking the revenue numbers down further, Verizon saw $20.0 billion in second-quarter 2013 from its wireless operations. The company revealed that its retail wireless connections passed the 100 million threshold during the quarter to reach 100.1 million.
Verizon’s consumer wireline operations earned $3.6 billion during the quarter, up 4.7% versus second-quarter 2012 and basically flat sequentially. Consumer ARPU for wireline services grew 9.4% year-on-year to $109.67.
FiOS revenues grew 14.7% from the year-ago quarter to $2.7 billion. ARPU for FiOS customers continued to be more than $150 in the quarter, Verizon said. The company sign up 161,000 net new FiOS Internet connections and 140,000 net new FiOS Video connectinos, bring the respective totals to 5.8 million and 5.0 million. Both totals represented year-on-year growth of more than 12%.
Verizon says FiOS Internet penetration was 38.6% by the end of this second-quarter, versus 36.6% at the end of second-quarter 2012. FiOS Video penetration rose to 34.5% compared with 32.6% in 2Q12. The FiOS network passed 18.0 million premises by the end of second-quarter 2013, the company added.
Meanwhile, 35% of FiOS Internet customers subscribed to FiOS Quantum, Verizon’s highest speed tier, which provides downstream rates from 50 to 300 Mbps.
Total broadband connections rose 1.9% year-on-year to 8.9 million, with FiOS Internet net customer additions more than offsetting a decline in subscribers for DSL-based Internet.
Those copper-based subscriber numbers should continue to decline as Verizon replaces its copper network with FTTH (see "Sandy restoration, fiber conversion in lower Manhattan nearly complete, says Verizon"). The company moved 169,000 homes to fiber in the first six months of this year and hopes to migrate a total of 300,000 connections within FiOS markets by the end of the year.
Overall, however, total wireline operations declined slightly both sequentially and year-on-year, to $9.7 billion (off $0.1 billiion sequentially and $0.2 billion versus 2Q12). Verizon blamed shrinkage in legacy transport and CPE as well as global enterprise business for the revenue reduction.
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