Verizon Communications Inc. (NYSE: VZ) reported third-quarter 2013 results before markets opened Thursday morning. The telecom giant posted adjusted diluted quarterly earnings per share (EPS) of $0.77 on revenues of $30.28 billion. In the same period a year ago, Verizon reported EPS of $0.64 on revenues of $29.01 billion. Third-quarter results also compare to the consensus estimates for EPS of $0.74 on revenues of $30.16 billion.
Operating expenses are down 1.6% year-over-year, with SG&A expenses down 3.9%. This reverses a sharp rise noted in the second quarter’s operating expenses, which rose 2.2% year-over-year in the period.
Verizon has arranged financing for its $130 billion buyout of the 45% stake in Verizon Wireless owned by Vodafone PLC (NASDAQ: VOD). The company will offer $49 billion in new debt and has an agreement to receive $12 billion in term loans to help finance the deal.
The company’s CEO said:
These strong third-quarter results reflect Verizon’s long-term investment in reliable, high-quality networks to deliver value to customers. Our unwavering focus on wireless, FiOS and strategic enterprise services has produced consistent performance, and we’ve delivered double-digit earnings growth in six of the past seven quarters. Verizon’s strategic networks form a powerful distribution platform for future growth and innovation.
Verizon Wireless generated $20.4 billion in second-quarter revenues, up 7.2% year-over-year. Postpaid average revenue per account (ARPA) rose 7.1% to $1,555.74. Wireless operating margin came in at 33.9%, up from 31.8% a year ago.
The number of retail postpaid customers grew by 1.1 million in the quarter, bringing Verizon’s total number of retail connections to 101.2 million, up 5.5% compared with the third quarter of 2012.
In the wireline business, revenues increased 4.3% to $3.7 billion in the third quarter, with most of the growth coming from the company’s FiOS service. Verizon added 173,000 new customers to its FiOS Internet service and 135,000 to its FiOS video service. FiOS Internet service is up 27.2% compared with the third quarter of 2012, and FiOS video service is 13.4% higher.
Verizon did not offer any revenue or earnings guidance, but the consensus estimates for the fourth quarter call for EPS of $0.59 on revenues of $30.94 billion. For the full year, estimated EPS totals $2.75 on revenues of $120.31 billion.
Shares were up about 3% at $48.66 in premarket trading Thursday morning, in a 52-week range of $40.51 to $54.31. Prior to this report, Thomson/Reuters had a consensus price target of around $53.60 on the company’s shares.