Verizon Communications Inc. (NYSE: VZ) shared its second-quarter 2014 results before markets opened Tuesday. The telecom giant reported adjusted diluted quarterly earnings per share (EPS) of $0.91 on revenues of $31.48 billion. In the same period a year ago, Verizon reported EPS of $0.73 on revenues of $29.79 billion. Second-quarter results also compare to the consensus estimates for EPS of $0.90 on revenues of $31.12 billion.
Verizon Wireless added 1.4 million net retail connections in the second quarter, of which all were postpaid (contract) subscribers. At the end of the quarter, Verizon Wireless claimed 35.2 million retail accounts and 104.6 million retail connections. Average revenue per account (ARPA) rose 4.7% year-over-year to $159.73 a month, essentially flat sequentially.
Wireless operating margin in the second quarter slipped from 35.0% in the first quarter to 32.5%. Total revenues in the wireless business came in at $21.5 billion, up 7.5% year-over-year and about 2.9% sequentially.
In the wireline business, Verizon added 139,000 new Internet connections and 100,000 new video connections to its FiOS fiber network. The company’s wireline business generated $9.8 billion in revenues for the quarter, up 0.3% year-over-year.
The company’s CEO said:
We have great momentum heading into the second half of the year. We remain focused on profitable growth and on meaningful network investments that provide our customers with the best, and with a continuously improving, overall experience.
Smartphones now account for 75% of the Verizon Wireless retail customer phone base, up from 72% in March. During the quarter Verizon added 1.15 million postpaid tablets to its roster, along with 304,000 new phones.
Verizon did not offer detailed revenue or earnings guidance, but it did say it expects top-line growth of 4% year-over-year. Based on 2013 revenues of $120.55 billion, that works out to $125.37 billion. Verizon did say that it continues to expect to invest $16.5 billion to $17.0 billion in the current fiscal year. The consensus estimates for the third quarter call for EPS of $0.93 on revenues of $31.45 billion. For the full year, estimated EPS totals $3.52 on revenues of $125.32 billion.
Verizon’s results were telegraphed last week when the company pre-announced its new subscriber additions. The shares will not move much — if at all — in a positive direction because investors were probably hoping for another surprise that Verizon did not deliver.
Shares were up down about 0.8% at $50.29 in premarket trading, in a 52-week range of $45.08 to $51.94. Prior to this release, Thomson/Reuters had a consensus price target of around $53.90 on the company’s shares.