Verizon Revenues Up On Wireless; Profits Down

Jul 27, 2009 (10:07 AM EDT)

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Verizon Communications highlighted its strong points -- wireless, broadband, video -- while continuing to trim wireline and employee head count as the telecom company reported revenue growth, but a 21% profit drop in its second quarter.

As usual, the firm's Verizon Wireless was the star performer, adding some 1.1 million net new subscribers, although most were picked up by Verizon's acquisition of Alltel. The wireless unit, which is 45% owned by Vodafone Group, has 87.7 million customers, more than any other US mobile service provider.

Verizon also added 300,000 new FiOS TV customers and 303,000 new FiOS Internet users.

However, local wireless connections fell more than 10% and bigger losses there loom as the company prepares to sell local phone operations to Frontier Communications in 13 states. Verizon said its total wireline revenues were $11.5 billion, which represents a 5.2% decline from last year's second quarter.

"Verizon posted continued strong wireless revenue growth and new levels of sales success with FiOS in the second quarter," said Verizon chairman and CEO Ivan Seidenberg in a statement. "This resilience in consumer demand for our wireless, broadband and video products has again produced overall revenue growth despite cyclical impacts, especially in business markets."

While Verizon Wireless' lineup of 1.1 million new mobile phones users was overshadowed by AT&T's iPhone-led 1.37 million new mobile phone subscribers in the quarter, Verizon Wireless said it plans a brace of new handsets including the BlackBerry Storm, Motorola Android phones, and eventually the Palm Pre. Verizon is also planning to begin rolling out powerful LTE-based handsets later this year.

For the quarter ending June 30, Verizon said it earned $1.48 billion, down from $1.88 billion in the year-earlier quarter. Revenues were $26.9 billion, up 11.3% bolstered by the Alltel acquisition.

Verizon Communications said it will cut more than 8,000 employee and contractor jobs by the end of the year. The carrier said it has 235,000 employees in all.

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