Verizon Surpasses Expectations By Doubling Profits

Verizon Communications Inc. (NYSE:VZ), the second largest wireless network carrier of United States, announced its third-quarter results that surpassed expectations by more than twofold.

The increased revenues were in part because of the contribution from the increased contracts of smartphone wireless subscribers and enhanced revenue limits for these customers.

The company reported an addition of 882,000 contract subscribers, which is 51% improvement above the same quarter last year, surpassing almost triple that of AT&T Inc.’s results.

In comparison to AT&T Inc.’s 2.1 million subscribers, Verizon gained 1.3 million an increase distinctive in its total customer subscriptions. AT&T gained more than a million users on Amazon’s tablet named Kindle e-reader, to which AT&T is the sole carrier.

In U.S., the wireless subscriptions have surpassed the total population of the country. Verizon and its competitors are struggling to introduce fresh subscriptions. Networks have increased mobile data costs and introduced the new devices such as the iPad from Apple Inc. to raise profits.

AT&T Inc.’s consecutive four years dominance over the iPhone was overthrown by Verizon in February this year, by initiating the sale of the new version of its innovative product the 4S, in contrary to Sprint Nextel Corp. and AT&T. AT&T announced 2.7 million iPhone activations in the third quarter while Verizon did not announced the number of the iPhone 4S sold in the same quarter.

Verizon Communications revenues grew 49 cents per share to $1.3 billion, an increase seen abruptly from 23 cents per share amounting to $659 million last year. Eliminating related costs namely the effect of pension and rewards recalculated, Earnings per share of Verizon increased from 55 cent per share to 56 cents last year.

Operating profit grew by 5.4 percent amounting to $27.91 billion while analysts’ estimates forecasted 55 cents per share of earnings amounting to total gains of $27.88 billion.

Last year operating margin was 12.8 percent that increased to 16.6 percent this year. Also last year, customers apparently moving to terminate the service were 1.43 percent which reduced to 1.26 percent this year.

FiOS television offerings, home and business telephones – traditional wireline business of Verizon Communications encountered a fall of 1.3% in profits to around $10.15 billion. Following the contraction experienced in these businesses, Verizon conveyed the unions to reduce the benefits presently provided for the traditional wireline business sector. The strike by company Union Workers and Hurricane Irene hitting the area raised company losses to $250 million.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.