Verizon Communications Inc. (NYSE: VZ) reported second-quarter results this morning that were inline with consensus estimates. Diluted earnings per share (EPS) came in at $0.64, on target with the estimate, and revenue totaled $28.6 billion versus an estimate of $28.56 billion. The EPS figure does not include any adjustments. Compared with the second quarter of 2011, EPS rose 12.3% and revenues were up by 3.7%.
The company’s strongest performer continues to be its wireless division. Verizon Wireless, a 60-40 joint venture with Vodafone Group plc (NASDAQ: VOD), now claims 94.2 million retail customers compared with 103.9 million claimed by AT&T Inc. (NYSE: T) at the end of the first quarter. Sprint Nextel Corp. (NYSE: S) and T-Mobile USA trail far behind in third and fourth place, respectively.
Data revenue at Verizon Wireless rose 18.5% year-over-year to $6.9 billion. Total service revenue jumped to $18.6 billion, up 7.4% over a year ago, and about two-thirds of Verizon’s total revenue. Verizon Wireless rolled out its shared data plan at the end of June, so it had virtually no impact on quarterly revenue. AT&T announced a similar plan yesterday, though it is priced somewhat higher than Verizon’s.
Verizon noted that it still expects to close its $3.9 billion spectrum acquisition deal with SpectrumCo later this summer. That deal has hit some roadblocks from regulators recently, especially on anticompetitive concerns from the U.S. Justice Department.
Verizon’s wireless operating margin was 30.8%; the operating margin in its wireline division was 1.9%. Two-thirds of the company’s wireline business is its fiber optic service, FiOS, which now claims 5.1 million subscribers for its Internet service and 4.5 million video subscribers.
In premarket trading this morning, Verizon’s shares are off about 1.6% at $45.12, in a 52-week range of $32.28 to $46.41. The high was posted yesterday.
Paul Ausick
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