Verizon reported Q1 revenue of $16.3 billion, down 0.6% on a comparable basis to the same period last year. Reported earnings were $3.9 billion, including a one-time gain of $2.1 billion associated with new accounting rules on asset retirement obligations. Operating expenses decreased 1.1%, while in long distance and DSL, Verizon saw growth rates similar to recent quarters. The company said it continues to improve its competitive position and generate increased value from its network. Some highlights for the quarter:
- 160,000 net additional DSL lines, compared to 148,000 net DSL addions in Q4 2002. The company had 1.83 million DSL lines at the end of the quarter. DSL results are now reported on the basis of lines billed rather than lines provisioned. About 63% of lines in the Verizon network were DSL-qualified as of the end of the quarter, giving it a potential pool of 36.7 million qualified lines. Verizon is targeting 80% DSL line qualification by year's end.
710,000 net additional long distance lines, giving it a total of 13.2 million LD lines. There was a 23% growth quarter-over-quarter in LD revenue.
There was stabilization or improvement in access line trends due to the popularity of unlimited local+LD service bundles. The number of UNE-P lines rose by 386,000 to 3.57 million lines, compared to 445,000 UNE-P new lines provided to competitors in Q4 2002. The number of resale lines declined by 50,000 to 999,000.
business revenues in Q1 declined 3% over last year due to economic conditions
data transport revenues increased 1.2% compared to last year due to continued strength in SONET, ATM, Frame Relay and DSL sales. However, lower speed services, especially DS0s and private lines, are declining.
free cash flow in Q1 was $2.29 billion, a 173% increase over the prior quarter
capital expenditures in Q1 were $2.47 billion, compared to $2.59 billion in Q2 2002
net debt reduction of $2.7 billion since year-end 2002. Verizon's net debt stands at $49.9 billion as of the end of Q1 2003, down from $61.9 billion at the end of Q1 2002.
Verizon Wireless added 833,000 net subscribers in Q1, giving it a total of 33.3 million users. Wireless ARPU was $47.20 compared to $45.81 for the same period last year.
Verizon had 227,000 employees at the end of the quarter, down from 245,000 last year.
Verizon's 2003 guidance is unchanged: revenue growth of 0% to 2%, adjusted EPS in the range of $2.70 to $2.80, capital expenditures in the $12.5 billion to $13.5 billion range, and net debt of $49 to $51 billion.
