Verizon's Net Drops on Items, But Beats By a Penny

Verizon reported a 34% drop in third-quarter net income to $1.27 billion, or $0.44/share, due to one-off items related to international taxes and a spin-off. However, adjusted EPS of $0.63 beat the Street's consensus estimate by a penny. Revenue growth of 5.8% to $23.77B topped estimates of $23.67B. Operating income increased 19% to $4.2B. "In recent years, we have transformed our business model and revenue base. Our results throughout 2007, and especially in the third quarter, show that our strategy has been successful. We expect to build on these results in the fourth quarter and beyond," commented CEO Ivan Seidenberg (see earnings call transcript later). Verizon added 285,000 new broadband connections, led by 229,000 FiOS [FTTP] connections, but suffered a steep y/y decline of 41% overall. Verizon added 202,000 new FiOS TV customers (now 717,000 in total). Verizon Wireless gained 1.6M new subscribers, compared to adds of 1.2M for AT&T and a loss of 337,000 for Sprint Nextel. Verizon said it repurchased nearly $800M of its common stock during the quarter and raised its calendar year target for repurchases by $500M for a total of $2.5B. Shares of Verizon gained 1.5% to $45.60 on Friday and were last up 0.8% to $45.98 in thin pre-market activity.

Sources: Press release, Bloomberg, MarketWatch
Commentary: Verizon Discovers Symmetrical Internet Service • Verizon Wireless Unveils Device to Rival iPhone • Verizon's FiOS Could Impact Cablevision Buyout Vote - WSJ
Stocks to watch: VZ. Competitors: T, S, Q, DT, CMCSA. ETFs: TTH, XLK, IYZ, IXP

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Comments

[King Kang:]

Curious as to what people think about Verizon's new fiber network, FiOS. I love Verizon wireless, but haven't tried FiOS yet. Is it really as good as all the hype? Or does it still have quite a few bugs to work out? Also, any competitors coming out with something to rival it? Can Verizon handle this? www.newsvisual.com/new...

2007 Oct 29 02:45 PM