Verizon CFO: OK With Looking at Dividend Increase

NEW YORK -(Dow Jones)- Verizon Communications expects revenue growth in the mid-single digits and double-digit earnings growth for the year, according to President and Chief Operating Officer Denny Strigl.

The company also is comfortable considering a dividend increase, said Chief Financial Officer Doreen Toben.

Verizon is on track to meet its financial objectives, and its long-term outlook is unchanged, Toben told analysts during a conference call Monday. In addition, she said she expects capital expenditures for the year to be lower than in 2007, when capital spending was $17.5 billion.

Regarding the lower FiOS TV customer additions, Toben noted that there was a lack of promotions, which affected growth. In the first quarter, Verizon ended its high-definition TV promotion.

Strigl said he expects FiOS TV growth to rise in the third quarter as the company pushes new promotions and it launches in New York City. The company plans to pass 30% of New York City and 57% of Manhattan by the end of the year.

FiOS is gaining scale and momentum, Toben said, noting that while the high-speed Internet service is maturing, demand for higher speeds remains strong.

Strigl said he still has a long-term goal margins on an earnings before interest, taxes, depreciation and amortization basis of 30% to 33% for the landline business.

Verizon Wireless maintains its general forecast of double-digit revenue growth and earnings before interest, taxes, depreciation, and amortization margins of 43% to 45%.

Verizon's business unit, meanwhile, continues to fare well with continued demand from large corporate customers. Toben said she expects revenue to pick up in the second half as several contracts begin contributing. Overall, the enterprise business remains competitive, she said.

On the prospect of a strike by its workers, Strigl said that he was optimistic Verizon will reach a fair settlement for the company and that it is making good progress.

The company's contract with its employees expires Saturday. The union representing the employees have authorized a strike.

On the iPhone, Strigl said there was limited impact from the Apple device. The impact was disproportionately less than its market share, he said.

Just after the market opened, shares of Verizon were at $33.59, down 86 cents, or 2.5%.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 28th July 2008