" VZ "(+2 @ $55 1/2) Rose 37% in Quarter On Strength in DSL, Wireless Units
A WSJ.com News Roundup
NEW YORK -- Verizon Communications said third-quarter net income jumped 37%, reporting robust demand for digital-subscriber line and wireless services.
The Baby Bell on Monday reported net income of $3.47 billion, or $1.27 a diluted share, compared with $2.54 billion, or 91 cents a share, a in 1999.
Excluding items, however, the company's results were flat, but matched Wall Street expectations.
The latest results included extraordinary gains of $1.5 billion, or 54 cents a share, for asset sales and other adjustments. Excluding these items the company said it earned $2 billion, or 73 cents a share. Excluding similar items and adjusting to include the U.S. wireless properties of Britain's Vodafone Group PLC, which were combined into Verizon Wireless this year, the company said it earned $2 billion, or 72 cents a share, for the third quarter of 1999.
"Our third-quarter results are the product of a sound long-term strategy and a disciplined focus on day-to-day operations," Charles R. Lee., Verizon's chairman and co-chief executive, said in a prepared statement.
Revenue including asset sales and other items rose 13% to $16.56 billion, from $14.66 billion a year earlier. Revenue from current operations rose 7.2% to $16.46 billion, from $15.36 billion a year earlier, but would have increased 7.4% if not for a strike in August, the company said.
The strike, which the company said cost it $40 million, showed the complications Verizon continues to faces as it works to integrate its units from different areas of the U.S. The company's workers in the Northeast were former employees of Nynex, which Bell Atlantic acquired a few years ago. Holdout employees in the mid-Atlantic had worked for Bell Atlantic, which merged in June with the former GTE, another regional phone giant, to form Verizon. Each of the three companies at one time had their own employee contracts.
But Chief Financial Officer Frederic Salerno said the integration of Bell Atlantic and GTE is proceeding smoothly. "I feel pretty good about where we are in the process," he said in a conference call. "Compared to Bell Atlantic-Nynex, I'd say we're further along in the integration."
Verizon attributed its earnings increase to its fast-growing DSL and wireless operations. Verizon said it added 130,000 DSL subscribers in the quarter and 806,000 Verizon Wireless subscribers.
"The big story here is DSL," said Patrick Comack, an analyst with Guzman & Co. "Finally, it's coming on." Mr. Lee said the company is on target to meet its year-end goal of 500,000 DSL customers.
The company also cited strengthening long-distance and international operations for its growth in revenue. At the end of the third quarter, Verizon said it had nearly 1.2 million New York long-distance customers and nearly 4.8 million nationwide, and said its international wireless customers grew 53% to 7.3 million.
Looking ahead, Verizon said it expects fourth quarter earnings between 76 cents and 78 cents a share, and expects revenue growth in 2001 between 8% and 10%. |
