Verizon Tops Second Quarter Earnings Estimates

Story Stocks^® Archive

Last Update: 22-Jul-11 12:26 ET

Verizon (VZ $36.51 -1.06) reported second quarter earnings of $0.57 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.55.

Revenues rose 2.8% year/year to $27.54 billion versus the $27.43 bln consensus.

Verizon continues to expect full-year 2011 capital spending to be similar to its 2010 investment of $16.5 bln. Service revenues in the quarter totaled $14.7 bln, up 6.6% year/year. Data revenues were $5.8 bln, up $1.1 bln or 22.2% year/year, and represent 39.5% of all service revenues.

Total revenues were $17.3 bln, up 10.2% year/year. Retail postpaid ARPU grew 1.9% or $1.00 over second-quarter 2010, to $54.12. Retail postpaid data ARPU increased to $21.26, up 15.2% year over year.

Retail service ARPU also grew 1.9%, to $52.49. Wireless operating income margin was 27.1%. Verizon Wireless added 2.2 million total connections, including 1.3 million retail postpaid customers, and 890,000 wholesale and other connections. These additions exclude acquisitions and adjustments. At the end of the second quarter, the co had 106.3 million total connections, an increase of 6.6% year over year, including 89.7 million retail customers and 16.6 million wholesale and other connections.

At the end of the second quarter, smartphones were 36% of Verizon Wireless' retail postpaid customer phone base, up from 32% at the end of first-quarter 2011. Retail postpaid churn was 0.89%, the lowest in the industry and the co's lowest since second-quarter 2008. Total retail churn was 1.22%, an improvement of 9 bps year/year and 11 bps quarter/quarter.