Verizon's postpaid adds, service growth relatively healthy

|About: Verizon Communications (VZ)|By:, SA News Editor

As previously disclosed, Verizon (VZ +0.6%) had 1.4M retail postpaid net adds in Q2, up from 941K a year ago and increasing the total base to 98.6M. 1.15M tablet net adds contributed heavily to the gains. Phone net adds were 304K. On the other hand, retail prepaid subs fell by 14K to 6.04M.

Wireless service revenue growth slowed to 5.9% Y/Y from 7.5% in Q1, but is still healthier than AT&T/Sprint's. Equipment revenue (pressures margins) +22.2%, boosted by smartphone upgrade plan adoption. Wireless op. margin +10 bps Y/Y to 32.5%.

Retail postpaid churn was 0.94% vs. 1.07% in Q1 and 0.93% a year ago. Average revenue/account (ARPA) rose fractionally Q/Q and 4.7% Y/Y to $159.73.

Wireline revenue (31% of total) +0.3% Y/Y vs. -0.4% in Q1. Consumer revenue +5.3%, but small business -2.2%, global enterprise -1.9%, and global wholesale -5.5%. Wireline op. margin was just 2.7%, but that's up from 0.8% a year ago.

FiOS TV adds totaled 100K, and Internet adds139K. Those numbers are up from Q1 levels, but down from year-ago levels. Verizon now has 5.4M FiOS TV subs, and 6.3M FiOS Internet subs. Total FiOS revenue +14.4% Y/Y.

Verizon still expects 2014 capex of $16.5B-$17.5B vs. $16.6B in 2013.

Q1 results, PR