updated 4/27/2005 10:49:32 AM ET 2005-04-27T14:49:32

Verizon Communications Inc. topped Wall Street forecasts with a first-quarter profit of $1.76 billion as its rapidly growing wireless business helped drive a 6.6 percent improvement in revenues.

The profit reported Wednesday by Verizon, currently locked in a tense bidding war for MCI Inc., amounted to 63 cents per share.

In the same period last year, Verizon earned $1.20 billion, or 43 cents per share, weighed down by $447 million in costs to cover early retirement packages as the company reduced its work force by 21,000 employees.

Revenues totaled $18.18 billion in the most recent quarter, up from $17.06 billion in the year-ago period.

Verizon Wireless contributed $7.41 billion, or 40.8 percent of the revenues, posting a fifth straight quarter of better-than 20 percent growth in sales.

The wireless business, owned in partnership with Vodafone Group PLC, increased its customer base by 1.64 million subscribers for a quarter-ending total of 45.5 million. Verizon Wireless also reduced the monthly rate of customer losses to 1.33 percent of its customer base, down from 1.43 percent in the final months of 2004 and well below the turnover rate at most of its major rivals.

Revenues declined again for the traditional wireline telephone business, totaling $9.50 billion, but the 1.2 percent drop was the smallest in nearly four years.

The broadband portion of wireline revenues rose 11.6 percent to $2.1 billion as the number of high-speed Internet subscribers grew by 385,000 for a total of 3.9 million, up 48 percent compared with a year earlier.

Long-distance phone revenues rose 8.3 percent to $1.1 billion as the customer base grew by 1.87 million to roughly 18 million.

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