Verizon Profits Rise as Wireless Growth Starts to Slow
Published on: 26th Jan 2009
Note -- this news article is more than a year old.
US based Verizon Communications has reported a rise in its fourth quarter profits, although growth in its wireless subscriber base slowed even as landline subscribers continued to shut down their accounts. The firm recorded a quarterly profit of USD1.2 billion compared to USD1.1 billion a year ago on sales of USD24.6 billion (compared to USD23.8 billion a year ago).
Verizon Wireless - the firm's joint venture with Vodafone - recorded 1.4 million organic (non-acquisition-related) net customer additions, almost all retail; 1.2 million total net customer additions, including a net customer loss under a previously announced exchange agreement related to the 3Q 2008 acquisition of Rural Cellular. The firm now has 72.1 million total customers; 70.0 million retail customers, up 9.9 percent, not including customers added with the Jan. 9, 2009, acquisition of Alltel.
Verizon Wireless continued to have low churn -- 1.35 percent churn among all customers, and 1.05 percent among the company's retail post-paid customers.
There was also a 12.3 percent increase in total revenues; data revenues up 41.4 percent; ARPU growth for 11th consecutive quarter; strong 47.2 percent EBITDA margin on service revenues.
"Verizon has shown that it is able to compete effectively in this economic environment," said Chairman and CEO Ivan Seidenberg. "We grew profits and maintained strong cash flows throughout 2008. In the fourth quarter, we continued to produce top-line growth, fueled by strong sales volumes for broadband, wireless and strategic business services.
For 2008, annual operating revenues were $97.4 billion, an increase of 4.2 percent from 2007 on a reported basis and 5.1 percent on an adjusted basis. Operating expenses totaled $80.5 billion in 2008, an increase of 3.3 percent from 2007 on a reported basis and 4.2 percent on an adjusted basis.