Verizon profit grows, but wireline disappoints
[2008-7-29]
Tag : Internet Phone Call
Verizon Communications Inc (VZ.N: Quote , Profile , Research , Stock Buzz ) posted a higher quarterly profit on strong wireless sales, butits shares fell on worries about its declining landlines andweaker-than-expected growth in its FiOS Internet and video service.
FiOS, delivered over a high-speed, all-fiber network, is a key partof Verizon's strategy to bolster its landline business and competewith cable companies' all-in-one phone, video and Internetofferings.
Second-quarter profit rose to $1.88 billion, or 66 cents a share,from $1.68 billion, or 58 cents a share, a year earlier. Excludingitems such as merger integration costs, earnings per share were 67cents, beating the average analyst forecast for 64 cents a share,according to Reuters Estimates.
Revenue rose 3.7 percent to $24.12 billion, in line with analysts'forecasts. But residential switched access lines fell 11.4 percent in thesecond quarter from a year earlier, while total lines fell 8.5percent, Verizon said on Monday.
Analysts said the results showed the company's massive investmentin FiOS was failing to stem a loss in traditional phone subscribersamid a weak economy.
"It's no surprise Verizon is losing access lines, but the rate atwhich they're losing them is enough to make you blanch," saidBernstein analyst Craig Moffett, adding the rate of access linelosses was the "worst in history."
Verizon Communications Inc (VZ.N: Quote , Profile , Research , Stock Buzz ) posted a higher quarterly profit on strong wireless sales, butits shares fell on worries about its declining landlines andweaker-than-expected growth in its FiOS Internet and video service.
FiOS, delivered over a high-speed, all-fiber network, is a key partof Verizon's strategy to bolster its landline business and competewith cable companies' all-in-one phone, video and Internetofferings.
Second-quarter profit rose to $1.88 billion, or 66 cents a share,from $1.68 billion, or 58 cents a share, a year earlier. Excludingitems such as merger integration costs, earnings per share were 67cents, beating the average analyst forecast for 64 cents a share,according to Reuters Estimates.
Revenue rose 3.7 percent to $24.12 billion, in line with analysts'forecasts. But residential switched access lines fell 11.4 percent in thesecond quarter from a year earlier, while total lines fell 8.5percent, Verizon said on Monday.
Analysts said the results showed the company's massive investmentin FiOS was failing to stem a loss in traditional phone subscribersamid a weak economy.
"It's no surprise Verizon is losing access lines, but the rate atwhich they're losing them is enough to make you blanch," saidBernstein analyst Craig Moffett, adding the rate of access linelosses was the "worst in history."
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