Verizon Communications Q1 2008 revenues grew 5.5 percent to $23.8 billion, compared with the first quarter 2007. Verizon reported Q1 earnings of 57 cents in diluted earnings per share (EPS), compared with earnings of 51 cents per share a year earlier. Non-GAAP earnings were 61 cents per share, a 13.0 percent increase year over year. Some highlights from the quarter:
“Verizon has weathered the current economic uncertainty with strong first-quarter results,” said Verizon Chairman and CEO Ivan Seidenberg. “I am also confident of our position over the long term because we have further opportunities to drive revenue growth and further opportunities to eliminate costs.”
Wireless
- The company added 1.5 million retail customers, of which 1.3 million were retail post-paid customers. At the end of the first quarter 2008, 97 percent of the company’s base was retail (post-pay and pre-pay). This gives the company a total subscriber base of 67.2 million.
- Total data revenues were up 48.9 percent over the prior year, contributing $2.3 billion. The company had 48.1 million retail data customers in March (nearly 74 percent of the retail customer base), a 33.8 percent increase over the prior year.
- In March, Verizon Wireless held its first Open Development Initiative (ODI) conference to provide minimum technical standards required for creating products that can physically connect to the Verizon Wireless network, and a process to certify that these products will operate on the company’s network. Plans call for customers to have the option to use products and services certified through the ODI process by the end of the year.
- In the 700 MHz auction, Verizon Wireless was the winning bidder for a nationwide spectrum footprint in the C-Block group of licenses, as well as 102 licenses for individual markets across the country.
- During the quarter, Verizon Wireless customers sent or received more than 58 billion text messages and 1.1 billion picture/video messages. Customers also completed 34.6 million music and video downloads.
- Total churn was 1.19 percent. Among the company’s retail post-paid customers, churn was even lower, at 0.93 percent.
- Revenues totaled $11.7 billion, up 13.2 percent year over year. Service revenues were $10.1 billion, an increase of 12.8 percent year over year, driven by customer growth and demand for data services. This is the first time quarterly service revenues have topped $10 billion.
- ARPU levels (average monthly revenue per customer) increased year over year for the eighth consecutive quarter. Retail service ARPU was $51.40, up 1.3 percent year over year; retail data ARPU was $11.94, up 33.4 percent over the same period last year.
- Wireless operating income margin was 27.9 percent, the highest ever.
Wireline
- Verizon added a net of 263,000 new FiOS TV customers. The company had 1.2 million FiOS TV customers in total as of the end of the quarter, having added more than 850,000 FiOS TV customers since the end of the first quarter 2007. The fiber network passed 10.4 million premises by the end of the quarter.
- FiOS Internet was available for sale to 7.9 million premises by the end of the quarter. Penetration for the service averaged 22.9 percent across all markets. FiOS TV was available for sale to 6.5 million premises by the end of the quarter. Penetration for the service averaged 18.7 percent across all markets.
- Verizon added a net of 266,000 new broadband connections – 262,000 from FiOS Internet service. Total broadband connections were 8.5 million (6.7 million DSL-based Verizon High Speed Internet connections and 1.8 million FiOS Internet connections), an increase of 14.9 percent compared with the first quarter 2007.
- Broadband and video revenues from consumer and small-business customers topped $1 billion, representing year-over-year quarterly growth of nearly 50 percent (56 percent growth in the consumer segment of broadband and video customers).
- Growing revenue from broadband and video services drove consumer ARPU in legacy Verizon wireline markets (which excludes consumer markets served by the former MCI) to $61.02, a 9.6 percent increase compared with last year’s first quarter. The ARPU among FiOS customers was approximately $129 per month.
- Wireline data revenues – which now represent nearly 40 percent of total wireline revenues – were $4.9 billion, an increase of 14.8 percent compared with the first quarter 2007. This includes revenues from consumer broadband services, and revenues from wholesale data transport and sales of Verizon Business data services.
- Verizon Business had revenues of $5.2 billion, or growth of 0.4 percent compared with last year’s first quarter. This is Verizon Business’ sixth consecutive quarter of year-over-year, pro-forma revenue growth (non-GAAP, calculated as if Verizon and MCI had merged on Jan. 1, 2005). Global enterprise revenue, representing retail sales, increased 2.0 percent to $3.9 billion, compared with last year’s first quarter.
- IP, managed services, Ethernet and optical ring services – continued to drive Verizon Business’ growth. These services generated $1.4 billion in revenue, up 23.5 percent from last year’s first quarter.
- Wireline total operating revenues were $12.3 billion, a 1.4 percent decrease compared with the first quarter 2007. Wireline total operating expenses were $11.2 billion, a 1.0 percent decrease compared with the first quarter 2007.
- Verizon Telecom’s total revenues of $7.8 billion decreased by 2.5 percent, compared with the first quarter 2007 – an improvement of 30 basis points over the year-over-year quarterly revenue decrease in the fourth quarter 2007. In legacy Verizon consumer markets, year-over-year revenues grew 0.9 percent, comparing first-quarter 2008 with first-quarter 2007.
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