Verizon’s (VZ) Mediocre Results

April 27, 2009 by Douglas A. McIntyre

bear39Verizon (VZ) posted modest results for the first quarter of the year.

Taking out the effects of its buy-out of Alltel, revenue rose 3.3%. With Alltel factored in Verizon’s total operating revenues grew 11.6% to $26.6 billion. Less impressive, the firm reported EPS of $.58 in the first quarter 2009, up 1.8% from the same period last year.

Verizon Wireless had 86.6 million customers at the end of the quarter, an increase of 28.8%year over year. This includes 13.2 million net total customer additions, after conforming adjustments, from the Alltel acquisition. Revenues from the segment totaled $15.1 billion, up 29.6%  but only up 9.0% on a pro forma basis.

Due mostly to a drop in residential landline customers, the Achilles Heel of the company, wireline total first-quarter operating revenues were $11.6 billion, a decline of 3.8%. Broadband additions were very unimpressive. There were 8.9 million connections in the first quarter, a net increase of 7.8% year over year.

Verizon’s fiber to the home business, FiOS made reasonable progress. The firm added 299,000 net new FiOS TV customers and had 2.2 million FiOS TV customers, an increase of 83.8% compared to the same quarter last year. FiOS TV sales penetration increased to 22.9%, compared with 18.7% in the first quarter 2008. FiOS TV service was available for sale to 9.7 million premises by end of the quarter.

Verizon’s long-term debt is up to $55.6 billion and another $13.4 billion in debt due this year. But, the company had $6.4 billion of cash flow from operations from the quarter, so the coverage ratio remains good.

But, without the Alltel acquisition, the quarterly results would have been mediocre.

Douglas A. McIntyre

Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE

Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply
clicking here
you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.


Click here
to match with up to 3 financial pros who would be excited to help you make financial decisions.