Verizon's 1Q earnings fall 8.4 percent

Verizon's 1Q earnings fall 8.4 percent

	Published : Mon, 30 Apr 2007 23:42 By : Agencies Print this Story

NEW YORK (AP) - Verizon Communications Inc.'s first-quarter earnings fell 8.4 percent to $1.5 billion as strong showings in the cell phone business and the crucial FiOS Internet and TV initiative were offset by the loss of income from assets the company sold over the past year.

The profit reported Monday also was hurt by a larger-than-expected loss of traditional telephone customers to cable TV companies and other rival providers, but the bottom line edged most Wall Street forecasts.

'Our objective is to lose less lines this year, and we have not backed away from that,' Verizon President Denny Strigl said in a conference call after the report, stressing that the number of activations of Internet and FiOS services exceeded the 408,000 regular phone lines turned off during the quarter.

The profit for the first three months of 2007 amounted to 51 cents per share. In the same period last year, before Verizon's spinoff of its phone directories business and another asset sale, earnings totaled $1.63 billion, or 56 cents per share. The latest results included a loss of 5 cents per share on the forced divestiture of Verizon's stake in a Venezuelan telecommunications company as the government there nationalized assets.

Verizon's stock rose 29 cents to close at $38.18 on the New York Stock Exchange.

First-quarter revenue grew 6.4 percent to $22.58 billion from $21.23 billion a year earlier.

Leading the improvement again was Verizon Wireless, where revenues grew 17 percent to $10.31 billion as the business added 1.7 million customers, finishing the quarter with 60.7 million.

The average revenue per user rose 2.8 percent to $50.73 per month, driven by gains in non-voice services, especially music downloads. Strigl said customers paid for 30 million music downloads, including full songs and ringtones. First-quarter revenue from those purchases was up 70 percent from a year earlier, he told The Associated Press in an interview, declining to provide a specific dollar amount.

The cell business, owned jointly with Vodafone Group PLC, also continued to demonstrate strong customer retention. The number of customers leaving Verizon Wireless averaged 1.08 percent of the customer base per month, well below the company's major rivals.

On the wired side of the company, phone and data services sold to businesses generated first-quarter revenues of $5.2 billion, up 2.3 percent from a year ago.

But Verizon's consumer revenue fell 3.5 percent to $4.2 billion as the company continued to lose residential phone customers as well as long-distance subscribers from the acquired MCI business.

Helping offset that was growth in subscribers for DSL broadband and the new FiOS cable TV and high-speed Internet services, delivered over a fiber-optic network the company is spending $23 billion to install.

The company said it added 416,000 high-speed Internet connections to finish the first quarter with 7.4 million lines, up 30 percent from a year earlier. Those numbers included a gain of 177,000 FiOS Internet accounts for a total of 864,000 subscribers.

The number of FiOS TV subscribers grew by 141,000 homes for a quarter-ending total of 348,000.

The number of homes where FiOS Internet is now available grew to 5.3 million premises, up by half a million from the end of 2006, and FiOS TV availability expanded by 700,000 to 3.1 million homes.

Verizon said its capital expenditures, dominated by the FiOS initiative and wireless network upgrades, were in line with the company's previously announced plans at $4.2 billion in the first quarter.

Total debt at the end of the first quarter was $34.7 billion, down from $36.4 billion at the end of December.