Verizon Communications reported total Q2 operating revenues of $26.8 billion, a decrease of 0.3 percent compared with second-quarter 2009. The company reported a loss of 7 cents in basic earnings per share (EPS) in the quarter, which included $2.3 billion in pre-tax costs for workforce reductions associated with a second-quarter incentive offer that will lead to approximately 11,000 voluntary separations this year.
Verizon noted continued strong cash flow growth, coupled with improved margins for both its Wireless and Wireline business segments, and improved revenue trends for sales to global business customers. Wireless data revenues were especially strong, up about 24% year-on-year. The company confirmed that its LTE launch is on schedule for Q4.
"Verizon showed solid improvement in operational results in the quarter," said Chairman and CEO Ivan Seidenberg. "In addition, the wireline spin-off to Frontier on July 1 improves our future growth profile. We see the opportunity to create additional shareholder value with a revenue portfolio that is now more heavily focused on wireless, FiOS and global IP." Seidenberg added, "We have the network platforms in place, and the product and service innovations in the pipeline, to fuel the next generation of growth in our changing industry. Our cost-reduction efforts are gaining momentum, and trends in the global business market are showing signs of stabilization."
Some highlights:
Wireless
Wireline Operations
Verizon Wireless also confirmed plans to launch its LTE network in 25 to 30 markets by the end of this year and cover virtually all of its current nationwide 3G footprint by the end of 2013. In addition, as part of its 4G LTE network deployment plans, Verizon Wireless announced efforts during the quarter to work with rural companies to collaboratively build and operate a 4G network in those areas, using Verizon Wireless' 700MHz spectrum.
http://www.verizon.com
Verizon noted continued strong cash flow growth, coupled with improved margins for both its Wireless and Wireline business segments, and improved revenue trends for sales to global business customers. Wireless data revenues were especially strong, up about 24% year-on-year. The company confirmed that its LTE launch is on schedule for Q4.
"Verizon showed solid improvement in operational results in the quarter," said Chairman and CEO Ivan Seidenberg. "In addition, the wireline spin-off to Frontier on July 1 improves our future growth profile. We see the opportunity to create additional shareholder value with a revenue portfolio that is now more heavily focused on wireless, FiOS and global IP." Seidenberg added, "We have the network platforms in place, and the product and service innovations in the pipeline, to fuel the next generation of growth in our changing industry. Our cost-reduction efforts are gaining momentum, and trends in the global business market are showing signs of stabilization."
Some highlights:
Wireless
- Verizon Wireless added 665,000 retail postpaid and 454,000 total retail customers in the quarter, excluding divestitures and adjustments, both increases over the first quarter of 2010.
- At the end of Q2, the company had 86.2 million retail customers, which represented nearly 94 percent of the company's wireless customers, the largest number of retail customers of any U.S. wireless provider. The company also added 896,000 reseller customers in the second quarter. The total number of customers at the end of the quarter was 92.1 million, after adding 1.4 million total net customers in the quarter and removing a net 2.1 million customers in connection with divestitures and conforming adjustments related to the Alltel acquisition.
- In addition, the company had 7.7 million "other connections" at the end of the quarter -- such as machine-to-machine, eReaders and telematics -- adding 264,000 net other connections in the quarter. This brings the number of total wireless connections to 99.7 million at the end of the second quarter.
- In the second quarter, data revenues increased to 34.5 percent of all service revenues, up from 29.3 percent in the second quarter 2009.
- Retail postpaid churn, retail churn and total customer churn remained low, at 0.94 percent, 1.33 percent and 1.27 percent, respectively. All are the company's best levels in nearly two years.
- Retail service revenues in the quarter totaled $13.5 billion, up 4.2 percent year over year. Retail data revenue was up 23.4 percent to $4.7 billion. Service revenues in the second quarter were $14.0 billion, up 5.2 percent. Total revenues were $16.0 billion, up 3.4 percent year over year.
- Retail service ARPU grew 0.9 percent over the second quarter of 2009 to $51.56. Retail data ARPU increased to $17.85, up 19.4 percent year over year.
- Wireless CAPEX was $2.3 billion due to the LTE rollout. Year-to-date, wireless CAPEX is $4 billion, which is up $698 million or about 21%.
Wireline Operations
- Verizon added 196,000 net new FiOS Internet customers and 174,000 net new FiOS TV customers. Verizon has posted consecutive quarterly gains in the number of customers using FiOS services since FiOS Internet was introduced in 2004, and by the end of the second quarter had 3.8 million FiOS Internet and 3.2 million FiOS TV customers.
- FiOS Internet penetration (customers as a percentage of potential customers) was 29.7 percent by the end of the quarter, with the product available for sale to 12.9 million premises. This compares with 28.1 percent and 11.0 million, respectively, at the end of second-quarter 2009.
- FiOS TV penetration was 25.9 percent by the end of the quarter, with the product available for sale to 12.4 million premises. This compares with 24.6 percent and 10.3 million, respectively, at the end of second-quarter 2009.
- Total wireline broadband and video revenues were $1.8 billion in the quarter, up 20.1 percent from second-quarter 2009. This includes FiOS broadband revenues, which grew 33.2 percent year over year. All FiOS-based services, including narrowband voice, generated 43 percent of consumer wireline revenues in second-quarter 2010, compared with 33 percent in second-quarter 2009.
- Wireline CAPEX was $1.8 billion, down by 24%. Year-to-date, wireline CapEx of $3.3 billion is down nearly $1 billion, reflecting lower FiOS deployment capital.
- Consumer ARPU for wireline services was $80.76 in the quarter, up 11.4 percent compared with second-quarter 2009. ARPU for FiOS customers was more than $145.
- Global enterprise revenue totaled $4.0 billion in the quarter, an increase of 0.6 percent compared with second-quarter 2009 and an improvement from the 1.4 percent year-over-year decline in the first quarter of 2010. Sales of strategic enterprise services -- such as security and IT solutions, as well as strategic networking -- generated $1.6 billion, up 6.2 percent compared with second-quarter 2009.
Verizon Wireless also confirmed plans to launch its LTE network in 25 to 30 markets by the end of this year and cover virtually all of its current nationwide 3G footprint by the end of 2013. In addition, as part of its 4G LTE network deployment plans, Verizon Wireless announced efforts during the quarter to work with rural companies to collaboratively build and operate a 4G network in those areas, using Verizon Wireless' 700MHz spectrum.
http://www.verizon.com
