Verizon Profits Surge Following Completion of Vodafone Deal
Published on: 24th Apr 2014
By: Ian Mansfield
USA based Verizon has posted its fifth consecutive quarter of double digit percentage growth in operating income as it fully consolidates its ownership of Vodafone's 45% stake in the wireless subsidiary for the first time.
Revenues rose by 4.8 percent for the three months to the end of March to reach USD30.8 billion, while net profit soared by 23 percent to USD5.99 billion.
First-quarter 2014 results included an after-tax gain of approximately $1.9 billion related to the sale of Verizon's minority interest in Vodafone Italy as part of the wireless transaction, and charges of $575 million related to debt redemption and $260 million in interest and financing costs related to the wireless transaction.
Lowell McAdam, Verizon chairman and CEO, said: "We are already seeing the expected earnings accretion from the transaction," McAdam added. "The full access we now have to the significant cash flows of Verizon Wireless is energizing our efforts to provide customers with product and service innovations and to enable powerful solutions to some of the world's biggest challenges."
Total wireless revenues were $20.9 billion in first-quarter 2014, up 6.9 percent year over year. Verizon Wireless added 549,000 retail net connections, including 539,000 retail postpaid net connections, in the first quarter.At the end of the first quarter, the company had 103.3 million retail wireless connections, including 97.3 million retail postpaid connections, a 4.4 percent increase year over year.
Capital expenditures totaled $4.15 billion in first-quarter 2014, and the company continues to target full-year investments in the range of $16.5 billion to $17 billion, with a decrease in capital spending as a percentage of total revenues.
The company ended the quarter with net debt of USD106.8 billion, a rise of USD66 billion over the past three months thanks to the Vodafone transaction.