Verizon reported Q3 revenues of $23.3 billion, up 25.8% from third quarter 2005, and diluted earnings per share (EPS) of 66 cents, or 68 cents per share before special items (non-GAAP measure).
Verizon Wireless is now the largest U.S. wireless carrier in terms of revenue. The company is also the largest wireless data provider based on data revenue, and it has the most retail customers — that is, businesses and consumers directly served by Verizon Wireless.
Some operational highlights:
- Verizon Wireless revenues were up 18.2 percent from third quarter 2005; data revenues nearly double year-over-year; EBITDA margin (non-GAAP) of 45.0 percent.
- Verizon Wireless retail service ARPU was $51.21
- Verizon Wireless added 1.9 million net customers, giving it a total of 56.7 million total customers, up 15.1 percent from third quarter 2005. Of these, 54.6 million were retail (non- wholesale) customers.
- Verizon Wireless had 1.24 percent total churn; 1.15 percent retail churn; 0.95 percent retail postpaid churn during the quarter.
- There were 448,000 net new broadband connections in Q3, including 147,000 FiOS Internet customers, for a total of 6.6 million total broadband connections, up 45.1 percent from third quarter 2005. The company now has a total of 522,000 FiOS Internet customers.
- Verizon’s FTTP (fiber to the premises) network passed a total of 5.3 million premises by the end of the third quarter and is on target to pass 6 million premises by year-end. Costs to pass a premises with fiber have declined to $845 in September 2006, already lower than the company’s year-end target of $850. Costs to connect a premises to fiber declined to $900 in September, toward a year-end target of $880.
- Penetration of FiOS Internet service now stands at 14 percent across all markets.
- Verizon added a net of 63,000 new FiOS TV customers in the third quarter 2006, compared with 35,000 in the second quarter 2006. Churn among FiOS customers remains lower than 1.5 percent per month, and costs associated with customer churn continue to be lower than anticipated.
- Penetration of FiOS TV service now stands at 10 percent across all markets, with the service available for sale to 1.2 million premises as of the end of the third quarter.
- FiOS represented $0.09 of total earnings dilution during Q3, up $0.02 from the second quarter, due to strong customer growth and higher video cost. Verizon now expects full-year FiOS earnings dilution to be about $0.31 to $0.32 per share, which is about $0.02 higher than the company’s previous guidance.
- Verizon now has 496,000 customers who receive a Verizon DIRECTV bundle, adding 64,000 net new customer additions in the quarter.
- Data revenues were $4.1 billion, up 89.3 percent from third quarter 2005, including results from Verizon Business domestic and global operations.
- Primary residential access lines decreased by 419,000 in the third quarter 2006, compared with the second quarter 2006, while Verizon added 539,000 residential broadband and video customers, including customers with DIRECTV bundles, over the same period.
- Verizon now serves 46.0 million total domestic wireline access lines — which also include secondary residential lines, public telephones, business lines and wholesale voice connections. This represents a 7.5 percent decrease compared with the end of the third quarter 2005.
Wireline
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