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Verizon's 2nd-quarter profit falls

Second-quarter profits fell 24 percent at Verizon Communications Inc., weighed down by labor and merger expenses, but the results exceeded most forecasts as the telephone company's cellular and broadband Internet businesses posted more strong growth.
/ Source: The Associated Press

Second-quarter profits fell 24 percent at Verizon Communications Inc., weighed down by labor and merger expenses, but the results exceeded most forecasts as the telephone company's cellular and broadband Internet businesses posted more strong growth.

New York-based Verizon said Tuesday it earned $1.61 billion, or 55 cents per share, for the three months ended June 30. In the same period last year, before the acquisition of long-distance carrier MCI Inc., Verizon earned $2.11 billion, or 75 cents a share, a result padded by one-time gains from the sale of operations in Hawaii.

Second-quarter revenues totaled $22.68 billion, a 25.6 percent increase that included the addition of sales from MCI's consumer and business lines. A year earlier, second-quarter revenues were $18.05 billion.

The latest profit included about 9 cents of expenses for pension and benefit costs, employee relocations and costs from integrating MCI into the business. Excluding those factors, the per-share profit was 64 cents, surpassing the consensus estimate of 62 cents among Wall Street analysts polled by Thomson Financial.

Revising Verizon's year-ago figures to include MCI's results from that period, operating revenues were 2.3 percent higher in the just-ended quarter, while operating income was up 12.4 percent.

In tandem with the second-quarter update, Verizon reiterated its expectation that the full-year's profit will be similar to last year's result of $2.56 per share before special items.