Verizon reported quarterly earnings of $2.1 billion, or 75 cents per diluted share, highlighted by a record-breaking quarter at Verizon Wireless, which added a record 1.9 million net customers during Q2. Wireline data revenues were also up 10.9 percent, driven by a net addition of 278,000 wireline broadband connections. Verizon is increasing its CAPEX plans by 15% for 2005 due to the strong growth at Verizon Wireless and increased spending for the deployment of Fios video services.
Overall, Verizon’s consolidated Q2 revenues were a record $18.6 billion, increasing 4.6% compared with the second quarter 2004.
Some highlights of the quarter:
Wireless
- Verizon Wireless added 1.9 million net new customers in Q2, the largest quarterly customer increase in the history of the wireless industry. Verizon Wireless has added 6.9 million net new customers over the past 12 months and now has a total of 47.4 million customers nationwide.
- There was record-low churn (customer turnover) of 1.2 percent. Churn in the retail post-paid segment — a base of 44 million customers — was 1.0 percent in the second quarter 2005.
- ARPU increased nearly 1 percent from the first quarter 2005 and decreased 2.7 percent from the second quarter 2004 to $49.42.
- Total quarterly revenues of $7.8 billion, up $1.0 billion, or 14.6 percent — the 12th consecutive quarter of double-digit year-over-year revenue growth increases
- Continued strong operating income margin of 22.7 percent
- Verizon said it is ahead of plan with the $1 billion national buildout by year-end of its 3G EV-DO network. During the second quarter, the company expanded broadband to now include more than 50 major metropolitan markets and surrounding areas, as well as 57 airports nationwide.
Wireline
- 4.1 million total broadband connections (DSL and Verizon Fios data lines), including 278,000 net new broadband connections
- Long-distance lines totaled 18.0 million at the end of the second quarter 2005, an 8.8 percent increase from a comparable total of 16.5 million lines at the end of the second quarter 2004.
- Improving revenue trends: Total quarterly revenues of $9.4 billion include a year-over-year gain in the consumer business, and gains from first quarter 2005 in all major lines of business.
- Data revenues up 10.9 percent; long-distance (LD) revenues up 6.7 percent
- Residential wireline customer ARPU rose to $50.92 in Q2, a 6.4 percent increase compared with the second quarter 2004.
- Approximately 60 percent of Verizon residential customers have purchased local services in combination with either Verizon long-distance or a Verizon broadband connection, or both. This compares with 49 percent in the second quarter 2004.
- Wholesale voice connections — which includes resale, Unbundled Network Element-Platform (UNE-P) and end-to-end wholesale voice services provided under commercial agreements — totaled 6.2 million at the end of Q2, down 6.4 percent from the end of Q2 2004. Verizon had 50.7 million switched wireline access lines in service as of the end of Q2 2005, down 5.5 percent on a comparable basis from last year.
CAPEX Increase Verizon anticipates that 2005 capital spending will increase approximately 15 percent over 2004 expenditures of $13.3 billion. This revises its previous guidance of an increase of approximately 10 percent. The increase is attributable to the strong growth at Verizon Wireless and increased spending for the deployment of Fios video services.
Debt Verizon’s total debt at the end of the second quarter 2005 was $41.8 billion, compared with $41.9 billion at the end of the second quarter 2004.
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