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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (43459)	8/1/2006 9:35:40 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 71015

Verizon's 2Q Profit Falls 24 Percent Tuesday August 1, 8:53 am ET By Bruce Meyerson, AP Business Writer Verizon's 2nd-Quarter Profit Falls 24 Percent on Labor, Merger Costs, but Tops Forecasts NEW YORK (AP) -- Second-quarter profits fell 24 percent at Verizon Communications Inc., weighed down by labor and merger expenses, but the results exceeded most forecasts as the telephone company's cellular and broadband Internet businesses posted more strong growth. ADVERTISEMENT New York-based Verizon said Tuesday it earned $1.61 billion, or 55 cents per share, for the three months ended June 30. In the same period last year, before the acquisition of long-distance carrier MCI Inc., Verizon earned $2.11 billion, or 75 cents a share, a result padded by one-time gains from the sale of operations in Hawaii. Second-quarter revenues totaled $22.68 billion, a 25.6 percent increase that included the addition of sales from MCI's consumer and business lines. A year earlier, second-quarter revenues were $18.05 billion. The latest profit included about 9 cents of expenses for pension and benefit costs, employee relocations and costs from integrating MCI into the business. Excluding those factors, the per-share profit was 64 cents, surpassing the consensus estimate of 62 cents among Wall Street analysts polled by Thomson Financial. Revising Verizon's year-ago figures to include MCI's results from that period, operating revenues were 2.3 percent higher in the just-ended quarter, while operating income was up 12.4 percent. In tandem with the second-quarter update, Verizon reiterated its expectation that the full-year's profit will be similar to last year's result of $2.56 per share before special items. At Verizon Wireless, jointly owned with Britain's Vodafone Group PLC, second-quarter revenues grew 18 percent to $9.26 billion, including a first-ever contribution of more than $1 billion from non-voice services such as ringtones, text messaging, e-mail and other data usage. Under accounting rules, all of the wireless operation's revenues are added to Verizon's revenue tally, rather than a share equal to its 55 percent ownership, because Verizon controls management of the business. Wireless profit margins came to 25.6 percent, up from 22.7 percent in the second-quarter of 2005. Verizon Wireless added 1.8 million customers in the quarter to finish with 54.8 million customers, second only to the 57.3 million subscribers at Cingular Wireless, a joint venture between AT&T Inc. and BellSouth Corp. The cellular business also posted another strong showing in terms of customer retention. Subscribers closing their accounts or switching to rival providers averaged 1.13 percent of the customer base per month during the quarter. That compared with a churn rate of about 1.2 percent a year earlier. On the wireline side, second-quarter revenues totaled $12.78 billion, an increase of 35.3 percent compared with a year -earlier, when MCI was not yet part of the company. The broadband operation added 440,000 subscribers to finish the quarter with 6.1 million. That tally includes 375,000 subscribers for the critical new FiOS broadband service, a gain of 110,000 for the three months. FiOS is being delivered over the new fiber-optic lines that are replacing copper phone lines across Verizon's network -- an upgrade expected to cost up to $20 billion overall. Verizon said it has now rewired the network in areas serving 4.5 million homes in 16 states, and that it remains on track for the year-end target of 6 million homes. The company said it has sold FiOS broadband service to about 12 percent of the homes in the markets where it is available. The company did not, however, provide any update on the number of subscribers for the new FiOS TV service, a crucial element of the rationale behind the network upgrade, but which has not yet been launched in all FiOS markets. [Harry: This will have a big ripple effect through the telecom equipment suppliers. Does VZ slow down the rate of deployment to improve profitability or does it continue to spend to build out future service to attract new subscribers.]