Verizon Narrowly Beats Street
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Verizon Communication's (NYSE: VZ) third-quarter profit plunged 29 percent while revenues rose 10 percent as Big Red managed to narrowly beat Wall Street estimates.
Verizon profit dove to $2.89 billion, or $0.41 per share, from $3.2 billion, or $0.59 per share, in the same period last year. Revenue, however, spiked a bit over 10 percent to $27.2 billion from $24.7 billion.
On an adjusted basis (non-GAAP), Verizon beat the Street by a penny, posting earnings of $0.60 per share. Analysts had expected $27.1 billion in revenue, with $0.59 per share, according to Thomson Reuters.
Verizon Wireless, owned by Verizon and Vodafone Group (NYSE: VOD), added 1.2 million net new subscribers in the quarter, trailing rival AT&T (NYSE: T), which added 2 million subscribers during the three-month period. Verizon remains the nation's No. 1 wireless carrier, however.
Mirroring the overall trend in the telecommunications industry, the company reported healthy wireless performance while its landline business suffered.
Mobile revenue jumped 24.4 percent to $15.8 billion for the third quarter, with the caveat that growth would have been just shy of 5 percent when accounting for the Alltell acquisition. Wireless profit margin, adjusted for one-time items, checked in at 28.3 percent.
Meanwhile, industry watchers speculated that a pair of ad campaigns taking shots at Apple's iPhone and AT&T would hurt chances for the company to strike a deal to offer the iconic handset next year, but the Verizon chief said he'd welcome any such invitations.
"The decision is in Apple's court," CEO Ivan Seidenberg said during the earnings conference call. "We would be interested if they wanted us as a partner."
Verizon's earnings come as wireless carriers report the first impact of the summer's signature releases from their key hardware partners -- namely the iPhone 3GS from Apple (NASDAQ: AAPL) for exclusive carrier AT&T, and the Pre from Palm (NASDAQ: PALM) for Sprint, which conducts earnings on Thursday.
Verizon, meanwhile, failed to generate much buzz in the smartphone sector over the summer, with the BlackBerry Tour representing one of its few big-name phone releases. However, the company is poised to begin selling Research In Motion's (NASDAQ: RIMM) Storm2 on Wednesday and has the Android-powered Droid set for an early November launch.
Despite Verizon's sluggishness in smartphones this quarter, Seidenberg touted the company's move to partner with Google (NASDAQ: GOOG) in jointly developing, marketing and selling Android handsets, leaving AT&T as the only top carrier not offering smartphones based on the open source mobile platform.
"We have been broadening the base of choices for our customers, and hopefully, Apple as well as others will decide to jump on the bandwagon," Seidenberg said.