Verizon Communications Inc. (NYSE: VZ) is out with its first-quarter earnings, and the company says that the wireless segment has seen expanded margin as its customer base grew. The telecom giant posted a 15% earnings gain to $0.68 per share as sales rose more 4% to $29.4 billion.

We consider today’s report somewhat mixed as the Thomson Reuters expectations were for $0.66 in earnings per share and $29.56 billion in revenue. The news is mixed on the surface, but we are concerned about the dividend yield, now that shares have outperformed the broad stock market so far in 2013.

Cash flow from operating activities grew by more than 26% to $1.6 billion, while capital spending in the first quarter was flat at $3.6 billion.

Verizon Wireless grew revenues by more than 8% and turned in operating income margin of 32.9%. Some 677,000 retail customers were added with only a 1.01% churn rate. The company said that its total retail connections are now 98.9 million. Total wireless revenue was up almost 7% at $19.5 billion, while average revenue per account rose by almost 7% to $150.27 per month.

FiOS brought in another 188,000 Internet and 169,000 video customers. Broadband connections totaled 8.9 million at the end of first-quarter 2013, a 1.4% year-over-year increase.

With mixed results and with this stock close to a 10-year high again, we wonder whether the 0.5% gain indicated this morning will hold. Shares closed at $49.54, against a 52-week range of $37.51 to $51.15. One issue we would hone in now is that Verizon’s dividend yield is down to 4.1%, since its shares have appreciated by 17% so far just in 2013 as investors continue to chase dividends.

Rival AT&T Inc. (NYSE: T) has seen its shares recently challenge post-recession highs as well. Its performance is just under 15% so far in 2013, but its dividend stands out higher at about 4.7%. With so much concern that Verizon will have to make a huge reach up financially to do something with Vodafone Group PLC (NASDAQ: VOD), and with it having such a lower dividend than AT&T, we will be more focused on AT&T during earnings season.

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