Verizon tops forecasts

City A.M. Reporter
Verizon Communications's second-quarter profit topped Wall Street estimates as it added more subscribers than expected in its first full quarter selling the Apple iPhone.

Verizon Wireless, owned by Verizon and Vodafone Group, added 1.3 million net subscribers in the quarter compared with the average expectation for about 930,000, according to seven analysts contacted by Reuters.

Verizon shares fell nearly 1 percent to $37.24 in pre-market trading.

Verizon activated 2.3m iPhones in the quarter compared with 3.6 million at AT&T.

But Stifel Nicolaus Chris King was impressed with Verizon's sale of 1.2 million high-speed wireless devices for a new network it is building.

"I don't see anything in there that should be disappointing," he said.

While some investors had worried that the relatively expensive iPhone would hurt Verizon's profit margins, King said its wireless service margin of 45.4 per cent was well ahead of his expectation for 43.9 per cent.

Verizon's quarterly profit was $1.61bn, or 57 cents a share, compared with a loss of $1.l9bn, or 42 cents a share, a year ago. This was ahead of the average analyst expectation for earnings per share of 55 cents.

Revenue increased 2.8 per cent to $27.53bn and was ahead of Wall Street expectations for $27.42bn.