The company benefited from stronger consumer spending, reflected in smartphone adoption, LTE data plans and FiOS subscriptions.
"In the third quarter, Verizon continued to deliver double-digit earnings growth and strong cash generation, and we remain solidly on track to meet our financial objectives for the year," said Lowell McAdam, Verizon chairman and CEO.
"With our 4G LTE network advantage, well-received Share Everything Plans and unmatched product portfolio, Verizon Wireless continues to do an outstanding job of balancing growth and profitability. Wireless achieved record profitability in a quarter in which we reported the highest number of retail postpaid gross and net adds in four years. Based on the strength of our FiOS fiber-optic network, we reported the highest growth in U.S. consumer wireline revenues in 10 years. Additionally, strategic services growth in our Enterprise business helped offset weaker revenues caused by global economic challenges. We are confident that we have the right plans in place to meet these challenges while improving the long-term profitability in both Consumer and Enterprise."
Some highlights from the release:
Wireless
- Service revenues in the quarter totaled $16.2 billion, up 7.5 percent year over year. Retail service revenues grew 7.9 percent year over year, to $15.5 billion.
- Retail postpaid ARPA (average revenue per account) grew 6.5 percent over third-quarter 2011, to $145.42 per month. Following the recent introduction of the Share Everything Plan and as customers continue to add multiple devices to accounts, Verizon Wireless now reports ARPA instead of ARPU since customers can share data among multiple devices.
- Verizon Wireless added 1.8 million retail net connections in the third quarter, including 1.5 million retail postpaid net connections, the highest in four years. These additions exclude acquisitions and adjustments.
- At the end of the third quarter, the company had 95.9 million retail connections, a 5.7 percent increase year over year, including 90.4 million retail postpaid connections.
- Verizon Wireless had 34.8 million retail postpaid accounts at the end of the third quarter, a 1.0 percent increase over the third quarter 2011, and an average of 2.6 connections per account, up 4.0 percent year over year.
- At the end of the third quarter, smartphones constituted more than 53 percent of Verizon Wireless' retail postpaid customer phone base, up from 50 percent at the end of second-quarter 2012.
- Retail postpaid churn was 0.91 percent in the third quarter, an improvement of 3 basis points year over year. Total retail churn was 1.18 percent in the third quarter, an improvement of 8 basis points year over year.
- Verizon Wireless continued to roll out its 4G LTE mobile broadband network, the largest 4G LTE network in the U.S. As of today (Oct. 18), Verizon Wireless 4G LTE service is available to more than 250 million people in 419 markets across the U.S.
Wireline
- Q3 operating revenues were $9.9 billion, a decline of 2.3 percent compared with third-quarter 2011. Wireline operating income margin was 0.4 percent, compared with 0.5 percent in third-quarter 2011. Segment EBITDA margin (non-GAAP) was 21.7 percent in third-quarter 2012, compared with 21.4 percent in third-quarter 2011.
- Consumer revenues grew 4.6 percent compared with third-quarter 2011. This is the highest year-over-year quarterly revenue increase in a decade and compares with a 2.5 percent year-over-year increase in second-quarter 2012.
- Consumer ARPU for wireline services increased to $103.86 in third-quarter 2012, up 10.3 percent compared with third-quarter 2011. This is an acceleration from an 8.5 percent ARPU increase, comparing second-quarter 2012 with second-quarter 2011.
- ARPU for FiOS customers was more than $150 in third-quarter 2012. FiOS services produced 66 percent of consumer wireline revenues in third-quarter 2012. About two-thirds of FiOS consumer customers have purchased a "triple play" of phone, Internet and video services.
- Global enterprise revenues totaled $3.8 billion in the quarter, down 3.6 percent compared with third-quarter 2011. Sales of strategic services increased 4.4 percent compared with third-quarter 2011 and represented 53 percent of global enterprise revenues in third-quarter 2012. Strategic services include Verizon Terremark cloud and data center services, security and IT solutions, advanced communications, and strategic networking.
- Verizon added 136,000 net new FiOS Internet connections and 119,000 net new FiOS Video connections in third-quarter 2012. Verizon had a total of 5.3 million FiOS Internet and 4.6 million FiOS Video connections at the end of the quarter, representing year-over-year increases of 14.4 percent and 15.4 percent, respectively.
- FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase. FiOS Internet penetration was 37.0 percent at the end of third-quarter 2012, compared with 34.6 percent at the end of third-quarter 2011. In the same periods, FiOS Video penetration was 32.9 percent, compared with 30.6 percent. The FiOS network now passes 17.4 million premises.
- Broadband connections totaled 8.8 million at the end of third-quarter 2012, a 2.3 percent year-over-year increase.
