NEW YORK CITY (dpa-AFX) - Telecom giant Verizon Communications Inc. (VZ) on Thursday reported a profit for the first quarter that doubled from last year, boosted by a gain from its acquisition of Verizon Wireless.
However, adjusted earnings per share missed analysts' expectations, while revenues beat their estimates. The company added 539,000 postpaid subscribers in the quarter, down 20 percent from last year.
Net income attributable to Verizon for the first quarter was $3.95 billion or $1.15 per share, up from $1.95 billion or $0.68 per share in the year-ago period.
The latest quarter's results include the impact of February's close of the $130 billion transaction to acquire full ownership of Verizon Wireless and an after-tax gain of $1.9 billion or $0.55 per share related to the sale of Verizon's minority interest in Vodafone Omnitel as part of the wireless transaction.
The results also include charges of $575 million or $0.17 per share related to debt redemption as well as $260 million or $0.08 per share in interest and financing costs related to the wireless transaction.
Adjusted earnings per share for the latest quarter were $0.84, compared to $0.68 in the year-ago period. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings per share of $0.87 for the quarter. Analysts' estimates typically exclude one-time items.
Total operating revenues for the quarter rose 5 percent to $30.82 billion from $29.42 billion in the year-ago period. Analysts' revenue consensus for the quarter was $30.70 billion.
Operating expenses for the quarter rose 2 percent from the prior-year quarter to $23.66 billion.
In Verizon Wireless, revenues rose 7 percent to $20.88 billion, with an 8 percent increase in service revenues. Retail postpaid average revenue per account or ARPA increased 6 percent to $159.67 per month.
Verizon Wireless added 549,000 million net retail connections, down 24 percent from the year-ago period. This includes 539,000 retail postpaid net connections in the quarter, representing a decrease of 20 percent from the prior-year quarter.
In the Wireline business, consumer retail revenues for the quarter grew 6 percent to $3.84 billion on continued strong customer demand for FiOS services. Total FiOS revenues grew 15 percent over the same period last year. Consumer Average Revenue Per User or ARPU for wireline services increased 11 percent to $120.17.
Verizon added 98,000 net new FiOS Internet connections in the quarter, down 48 percent from last year. Net new FiOS Video connections declined 66 percent to 57,000.
Verizon had a total of 6.2 million FiOS Internet and 5.3 million FiOS Video connections at the end of the first quarter, representing year-over-year increases of 9.9 percent and 8.7 percent, respectively.
Looking ahead to fiscal 2014, Verizon continues to target consolidated top-line growth of 4 percent and adjusted consolidated EBITDA margin expansion, with positive contributions to profitable growth from both wireless and wireline.
VZ is trading at $46.40, down $1.03 or 2.17 percent on a volume of 18.44 million shares.
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