Net income fell to $3.16 billion, or 52 cents per share, down from $3.4 billion, or 66 cents, the New York-based company said in an earnings press release. Revenue soared 11.3 percent to $26.9 billion, helped by the acquisition of Alltel Corporation. On a pro forma basis, operating revenue growth was 1.9 percent. Earnings on an adjusted basis were 63 cents per share. Wall Street expected the No. 1 wireless company to earn 63 cents on revenue of $26.85 billion, according to Thomson Reuters. The results disappointed investors who sent shares down in pre-market trading.
The job cuts indicate that the the broader economy continues to affect Verizon, Chief Financial Officer John Killian is quoted by Reuters as saying on the earnings conference call.
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Matt Rourke, AP
Matt Rourke, AP
Shares of Verizon Wireless are down about seven percent this year as investors fretted about whether cash-strapped consumers and businesses would have difficulty in paying their bills. Moreover, AT&T Inc. (T) got lots of buzz because of its exclusive relationship with Apple Inc. (AAPL) to sell the iPhone. AT&T added 1.37 million customers in the quarter.
That may not last much longer. Earlier this year, The New York Times reported that Verizon Wireless (which Verizon Communications owns with Vodafone) was in talks with Apple to sell its popular smartphone. Apple, though, still turned to AT&T when it unveiled new iPhone models in June
Verizon Wireless had 87.7 million customers at the end of the quarter, an increase of 27.7 percent year-over-year and 7.9 percent on a pro forma basis. It added 1.1 million retail customers on a net basis for a total of 85.2 million. Both total churn and retail post-paid churn improved in the quarter to 1.37 percent and 1.01 percent, respectively.
The company's FiOS Internet business continues to do well, adding 303,000 net new customers for the second consecutive quarter. As of the end of the second quarter, Verizon had 3.1 million, FiOS Internet customers, a gain of 56.1 percent from last year. It had 2.5 million FiOS TV customers by the end of the quarter, an increase of 82.1 percent.