Verizon 3Q profit soars as number of devices grows
New York » Verizon's third-quarter net income jumped 40 percent to beat Wall Street expectations as it continued to add more wireless devices to its network.
The country's largest cellphone carrier earned $2.23 billion, or 78 cents per share, up from $1.59 billion, or 56 cents per share, in the same quarter of 2012. Excluding one-time items, the company posted an adjusted profit of 77 cents per share for the recent quarter.
Revenue rose 4 percent to $30.28 billion from $29.01 billion.
Analysts polled by FactSet expected a profit of 74 cents per share on $30.15 billion in revenue.
The New York company added 1.1 million net retail wireless connections during the quarter. Of that total, 927,000 were connections that involved monthly service contracts.
As of Sept. 30, the company had 101.2 million retail wireless connections, representing a 6 percent increase over the same day a year ago.
Revenue at the wireless division rose 7 percent to $20.4 billion. That growth included an 8 percent increase in service revenue to $17.5 billion, which Verizon said stemmed from the increase in the number of wireless devices coupled with higher data usage and the continued shift toward smartphones.
Francis Shammo, Verizon's executive vice president and CFO, said during a conference call with investors that the company did run into supply problems with Apple's new iPhones, which went on sale during the quarter. As a result, some sales that would have occurred during September were pushed into October, he said.
Shammo also said that Verizon's new Edge program, which launched in late August and allows customers to pay for phone on an installment basis, didn't really pick up speed until September, so it didn't have a significant effect on the company's third-quarter bottom line.
The company also saw growth at its wireline business, which provides landlines along with the company's FIOS internet and TV services. Consumer revenue at the division rose 4 percent to $3.7 billion, mainly as a result of higher demand for FIOS.
Verizon announced last month that it would spend $130 billion to buy the 45 percent stake in its wireless division that was owned by Vodafone Group PLC. Once that deal closes, it will no longer have to share its wireless revenue with the British cellphone company.
The deal is expected to close during the first quarter of 2014.
Shares of Verizon Communications Inc. rose $1.45, or 3 percent to $48.70 in morning trading.