Verizon reports Q1: Earnings up 16%, 734,000 net subscriber additions

Verizon on Wednesday reported earnings for the 1st quarter that narrowly beat analysts’ expectations. The nation’s best carrier posted a profit of $ .59 per share, up about 16% over the identical quarter last year and $ .01 above Wall Street’s consensus. Income grew four.6% year over year to $ 28.two billion, and net subscriber additions totaled 734,000. Verizon said that 47% of its postpaid subscriber base owned smartphones at the end of the initial quarter, up from 43.five% in the same quarter last year. Monthly typical income per user grew 3.4% to $ 53.66. ”Verizon delivered double-digit earnings growth and strong money flow this quarter,” Verizon CEO Lowell McAdam said. “We built momentum coming out of 2011, and our results show that we continue to execute in the crucial growth places of our organization. Verizon Wireless made both fantastic growth and great margins, and we developed another strong quarter of FiOS growth. We are confident we will improve Wireline margins for the full year. Our repositioning of Verizon Enterprise Solutions has much better aligned our strengths in high-growth markets, and we expect our enterprise company to contribute even a lot more to overall Wireline income growth and profitability more than time.” Verizon’s complete press release follows below.

Verizon Reports Double-Digit Earnings Growth and Increased Operating Money Flow in Initial-Quarter 2012

Verizon Wireless Increases Service Revenues by 7.7 Percent, Expands Margins Demand Remains Strong for FiOS and Strategic Services

1Q 2012 HIGHLIGHTS

Consolidated

  • 59 cents in diluted earnings per share (EPS), compared with 51 cents per share in 1Q 2011 – a 15.7 percent increase.
  • $ 6. billion in money flow from operating actions, up $ 922 million compared with 1Q 2011.
  • 4.6 percent year-over-year quarterly income growth. 

Wireless

  • 7.7 percent year-more than-year enhance in service revenues in 1Q 2012 8.9 percent year-over-year enhance in retail service revenues highest growth rate in 3 years data revenues up 21.1 percent 28.six percent operating income margin and 46.3 percent Segment EBITDA margin on service revenues (non-GAAP).
  • 734,000 retail net client additions, excluding acquisitions and adjustments, contains 501,000 retail postpaid net customer additions continued low retail postpaid churn of .96 percent.
  • 93. million total retail consumers 88. million total retail postpaid customers.

Wireline

  • 193,000 FiOS Internet and 180,000 FiOS Video net additions, with increased sales penetration for each items net increase of 104,000 broadband connections from 4Q 2011 FiOS Internet buyers now total much more than 5 million.
  • 8.1 percent year-over-year enhance in customer ARPU 63 percent of customer revenues generated by FiOS.
  • 11.six percent increase in strategic services revenues, representing 51 percent of global enterprise revenues.

NEW YORK – Verizon Communications Inc. (NYSE, Nasdaq: VZ) right now reported double-digit percentage growth in year-more than-year quarterly earnings outcomes and increased cash flow in very first-quarter 2012.  Verizon Wireless posted one more quarter of profitable revenue growth, while Verizon’s Wireline segment posted one more quarter of client and revenue gains for FiOS fiber-optic services, and elevated sales of strategic enterprise services.

Verizon reported 59 cents in EPS in first-quarter 2012, an enhance of 15.7 percent compared with first-quarter 2011 earnings of 51 cents per share.  There were no adjustments in either period.

‘On Track to Continue to Deliver Strong Results’ 

“Verizon delivered double-digit earnings growth and sturdy cash flow this quarter,” stated Lowell McAdam, Verizon chairman and CEO.  “We built momentum coming out of 2011, and our results show that we continue to execute in the essential growth areas of our enterprise.  Verizon Wireless made both fantastic growth and excellent margins, and we created an additional robust quarter of FiOS growth.  We are confident we will increase Wireline margins for the full year.  Our repositioning of Verizon Enterprise Solutions has far better aligned our strengths in high-growth markets, and we anticipate our enterprise organization to contribute even much more to general Wireline income growth and profitability more than time.”

He added: “We remain confident in our ability to take benefit of the growth opportunities we see, and we are focused on driving operating efficiencies.  We are on track with our plans and anticipate to continue to deliver strong outcomes.”

Robust Money Flows, Elevated Capital Efficiency 

In 1st-quarter 2012, Verizon’s total operating revenues had been $ 28.two billion on a consolidated basis, an boost of four.6 percent compared with very first-quarter 2011.

Consolidated operating revenue was $ 5.2 billion in very first-quarter 2012, compared with $ four.five billion in initial-quarter 2011.  Consolidated EBITDA (non-GAAP, earnings ahead of interest, taxes, depreciation and amortization) totaled $ 9.2 billion in 1st-quarter 2012, compared with $ 8.five billion in 1st-quarter 2011.

Cash flow from operating activities totaled $ 6. billion in initial-quarter 2012, an increase of $ 922 million compared with 1st-quarter 2011.  Capital expenditures totaled $ three.6 billion in initial-quarter 2012, a lower of $ 798 million compared with 1st-quarter 2011, as Verizon enhanced its capital-to-revenue efficiency.  Cost-free cash flow (non-GAAP, cash flow from operations much less capex) was $ 2.four billion in initial-quarter 2012, compared with $ 672 million in very first-quarter 2011.  Verizon expects escalating free cash flow levels by way of 2012.

Verizon Wireless Delivers Powerful Economic, Operational Outcomes

In first-quarter 2012, Verizon Wireless delivered strong growth in revenues and retail clients elevated retail postpaid ARPU (typical monthly service income per user) and smartphone penetration and delivered a powerful EBITDA margin.

Wireless Monetary Highlights

·         Service revenues in the quarter totaled $ 15.4 billion, up 7.7 percent year more than year.  Retail service revenues grew 8.9 percent year more than year, to $ 14.9 billion, an boost of 110 basis points more than fourth-quarter 2011 and the highest growth rate in 3 years.

·         Data revenues had been $ six.6 billion, up $ 1.1 billion – or 21.1 percent – year over year, and represent 42.9 percent of all service revenues.  Total revenues were $ 18.three billion, up 8.2 percent year over year.

·         Retail postpaid ARPU grew 3.6 percent over very first-quarter 2011, to $ 55.43.  Retail postpaid data ARPU elevated to $ 23.80, up 16. percent year more than year.  Retail service ARPU grew 3.four percent, to $ 53.66.

·         Wireless operating earnings margin was 28.6 percent.  Segment EBITDA margin on service revenues (non-GAAP) was 46.3 percent.

Wireless Operational Highlights

·         Verizon Wireless added 734,000 retail net buyers in the 1st quarter, such as 501,000 retail postpaid net clients.  These additions exclude acquisitions and adjustments.

·         At the end of the first quarter, the business had 93. million retail customers, a five.2 percent increase year more than year, including 88. million retail postpaid buyers.

·         At the finish of the very first quarter, almost 47 percent of Verizon Wireless’ retail postpaid consumer phone base had been smartphones, up from 43.5 percent at the end of fourth-quarter 2011.

·         Retail postpaid churn was .96 percent, an improvement of 5 basis points year more than year. Total retail churn was 1.24 percent, an improvement of 9 basis points year over year.

·         Verizon Wireless continued to roll out its 4G LTE mobile broadband network, the biggest such network in the U.S.  As of right now, Verizon Wireless 4G LTE service is accessible to a lot more than 200 million people in 230 markets across the U.S. – much more than two-thirds of the population.

·         Verizon Wireless introduced 5 new 4G LTE devices in the very first quarter 2012:  the Droid four and Droid Razr Maxx by Motorola, the Spectrum and Lucid by LG, and the Samsung Galaxy Tab 7.7.  In addition, the Apple iPad with Wi-Fi + 4G became offered from Verizon Wireless in mid-March.

FiOS Continues to Add Clients, Increase Sales Penetration

In 1st-quarter 2012 in the Wireline segment, continued sturdy demand for FiOS services led to revenue growth generated by U.S. consumer wireline customers and continued gains in FiOS sales penetration.  Globally, continued strong sales of strategic services helped mitigate lower revenues resulting from Verizon’s targeted efforts to eradicate goods that do not meet the company’s profitability requirements, and continued secular pressures in wholesale.

Wireline Monetary Highlights

·         1st-quarter 2012 operating revenues had been $ 9.9 billion, a decline of 2. percent compared with very first-quarter 2011.  Wireline operating income margin was 1.6 percent, compared with two.8 percent in first-quarter 2011, and Segment EBITDA margin (non-GAAP) was 22.six percent, compared with 23.six percent in 1st-quarter 2011.

·         Consumer revenues grew 1.7 percent compared with 1st-quarter 2011.  Consumer ARPU for wireline services was $ 97.88 in first-quarter 2012, up 8.1 percent compared with initial-quarter 2011.  ARPU for FiOS consumers continued to total a lot more than $ 148 in 1st-quarter 2012.  FiOS services to consumer retail buyers represented 63 percent of consumer wireline revenues in initial-quarter 2012.

·         International enterprise revenues totaled $ 3.9 billion in the quarter, up .9 percent compared with very first-quarter 2011.  Sales of strategic services – including Terremark cloud services, security and IT solutions, and strategic networking – increased 11.6 percent compared with initial-quarter 2011 and represented 51 percent of global enterprise revenues in very first-quarter 2012.

Wireline Operational Highlights

·         Verizon added 193,000 net new FiOS Web connections and 180,000 net new FiOS Video connections in very first-quarter 2012.  Verizon had a total of five. million FiOS Internet and four.four million FiOS Video connections at the finish of the quarter.

·         FiOS penetration (subscribers as a percentage of potential subscribers) continued to improve.  FiOS World wide web penetration was 36.four percent at the end of very first-quarter 2012, compared with 33.1 percent at the end of initial-quarter 2011.  In the very same periods, FiOS Video penetration was 32.3 percent, compared with 29.1 percent.

·         Broadband connections totaled 8.8 million at the end of first-quarter 2012, a three.3 percent year-more than-year boost.  The net boost of 104,000 broadband connections from fourth-quarter 2011 was the highest quarterly net-add total because second-quarter 2009.

·         Verizon continued to expand its subsequent-generation 100 gigabit-per-second network, enabling several a lot more network routes in the U.S. and two further routes in Europe.

·         The business also took benefit of the fully activated Europe India Gateway submarine cable technique. The 15,000 kilometer high-bandwidth optical program, with a design capacity of 3.84 terabits per second, provides a lot needed diversity for future World wide web, e-commerce, data, video and voice services from the United Kingdom to India.

Strategic Agreements Unveiled for International Sales

Verizon Enterprise Solutions, a sales and marketing and advertising organization that harnesses all of Verizon’s cloud, mobility and technologies solutions for business and government buyers globally, unveiled strategic agreements in initial-quarter 2012 to develop offerings in mobile health, electronic well being records management and secure e-prescribing.

The organization also announced a digital-signage solution for retail customers, powered by Verizon’s 4G LTE network and infrastructure unveiled new telematics solutions for the automotive and transportation industries and rolled out a cross-platform open video communications capability.

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