Verizon 1Q profit falls 8.4 percent

Verizon 1Q profit falls 8.4 percent

	Published : Mon, 30 Apr 2007 15:02 By : Agencies Print this Story

NEW YORK (AP) - Verizon Communications Inc.'s first-quarter earnings fell 8.4 percent to $1.5 billion as the loss of income from some divested operations outweighed another strong showing by the telephone company's fast-growing wireless business.

The profit for the first three months of 2007 amounted to 51 cents per share, the company reported Monday. In the same period last year, before Verizon's divestiture of its phone directories business, 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.

Excluding that loss and other unusual factors, first-quarter profits totaled 56 cents per share, topping the forecasts of most Wall Street analysts polled by Thomson Financial.

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

Verizon shares rose 28 cents to $38.17 in morning trading on the New York Stock Exchange.

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.

The cell phone business also continued to demonstrate strong customer retention. The number of customers leaving Verizon Wireless, known as churn, averaged 1.08 percent of the customer base per month, well below the company's major rivals.

But on the wired side of Verizon's business, consumer revenue fell 3.5 percent to $4.2 billion as the company continued to lose residential phone customers in its traditional business as well as long-distance subscribers from the MCI business acquired a year ago.

Helping offset those losses was growth in subscribers for DSL broadband Internet and Verizon's 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 broadband connections, including 177,000 FiOS Internet accounts, to finish the first quarter with 7.4 million homes, up 30 percent from a year earlier. 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 year-end 2006.