Verizon Announces 4.5% Increase in Second-Quarter Earnings

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Verizon Announces 4.5% Increase in Second-Quarter Earnings

6:15 am on July 31, 2007 | Category: Business, Telecom Services

Verizon Communications Inc. announced a slight increase in second-quarter profit yesterday, helped along by growth in its wireless and fiber-optic broadband businesses.

Net earnings were up 4.5% to $1.68 billion, or $0.58/share, from $1.61 billion in the same three month period a year earlier. Operating revenue, meanwhile, rose 6.3% to $23.37 billion, basically in line with Wall Street’s expectations.

Verizon Wireless, a 55/45 joint venture between Verizon and Vodafone Group, continues to perform well, and is helping to ensure overall revenue growth despite losses in the traditional telephone sector.

Verizon’s new fiber-optic broadband and television network, FiOS, is also showing promising signs of growth. A total of 515,000 customers had signed up for FiOS TV as of June 30, up from just 55,000 on the same data a year ago. The cost of deploying FiOS hurt earnings by $0.10/share, however, and will likely continue to do so for the next several quarters.

Verizon’s plan of investing $18 billion in fiber-optic infrastructure by 2010, while costly, will likely be necessary to offset long-term losses in the home telephone market.