NEW YORK -(Dow Jones)- Verizon Communications Chief Executive Ivan Seidenberg said he remains interested in buying Vodafone Group's 45% stake in Verizon Wireless, but no actions have been taken on either side.
"The decision is more in their court at this point," Seidenberg said during a Tuesday conference call to discuss the company's quarterly results. He said he has made clear his desire to buy out Vodafone's stake.
In the short term, taking full control of Verizon Wireless would mean a trade off between higher debt and higher earnings, which he said was financially attractive. Longer term, full control would allow Verizon to be more competitive regionally.
He added he sees little cost savings from taking over Vodafone's stake.
The New York telephone company reported first-quarter net income of $1.63 billion, or 58 cents a share, compared with $1.76 billion, or 63 cents, a year earlier.
Excluding one-time items including an accounting change and merger-integration costs, Verizon posted earnings of 60 cents a share, a penny ahead of analysts' average estimate.
Revenue rose 25% to $22.74 billion from $18.18 billion a year ago.
Verizon should see its earnings ramp up in the second half, Chief Financial Officer Doreen Toben said Tuesday.
First-quarter results should prove to be the weakest for the year, she said, adding that improvements in the company's Verizon Business unit and in cost reduction from its integration of MCI Inc. should drive performance in the second half.
Toben added she expects to see improvement in the wireline business as the year goes on.
Verizon cut its costs through the reduction of its headcount by 6,000 jobs, Toben said Tuesday. Of those jobs, 1,200 were eliminated through the integration of acquisition MCI Inc., she said.
Other factors such as lower contract services, increased automation and self-service initiatives helped reduce expenses, she said.
Toben backed the company's estimate of producing $550 million in cost savings from the integration of MCI.
Verizon Wireless wasn't hurt by the fact that its phones were no longer sold at RadioShack, Toben said. Indeed, RadioShack has reported difficulties in its transition to offering Cingular Wireless phones from Verizon.
In the first quarter, the wireless carrier launched a prepay service sold out of Wal-Mart Stores.
Toben said Verizon remains committed to buying back $1 billion worth of stock for the year. Year to date, it has repurchased $400 million in stock.
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 2nd May 2006
Posted to: www.cellular-news.com/story/17204.php