A 25 percent surge in wireless services sales helped boost Verizon Communications Inc.'s second-quarter profit five times higher from a year ago, the company said Tuesday. The results beat Wall Street expectations.
The nation's largest telecom company, based in New York, earned $1.8 billion, or 64 cents a share, up from $338 million, or 12 cents a share, in the year-ago quarter. Revenues for the quarter were $17.84 billion, compared with $16.83 billion a year before.
Analysts polled by Thomson First Call had been expecting earnings of 60 cents a share.
The nation's largest telecom company, based in New York, said about 50 percent of its residential customers buy "bundles" of service, which package Verizon's local service with either long-distance or DSL. Rival AT&T Corp. announced last week that it would stop competing for residential customers, saying a recent regulatory ruling would increase its costs of providing local service and make it impracticable to bundle services together.
During the quarter, however, Verizon restated and reduced the number of its long-distance customers by 1.5 million, following an inquiry by the Securities and Exchange Commission. Despite the reduction, the company still reported a year-over-year increase, to 16.8 million long-distance customers, from 13.8 million for the same period a year ago.
Sales in the company's wireless division were 25 percent higher than they were for the year-ago quarter. Verizon said its wireless division, which it jointly owns with the United Kingdom's Vodafone Group PLC, has 40.4 million wireless customers. The division's profit margin widened and its customer churn rate, a measure of how many customers leave each month, hit a company record-low.
The company said it also installed 52 percent more DSL lines than it had in the year-ago quarter. It now has more than 2.9 million DSL lines in service.
For the first six months of the year, the company had profits of just under $3 billion, or $1.07 per share, up from $2.75 billion, or 99 cents per share, a year ago. Its revenues were $34.97 billion, up from $33.32 billion for the first six months of last year.