Verizon reports Q3 2012 results, profits and ... - The Cell Phone Junkie

Verizon Thursday reported Q3 earnings results, blowing past Wall Street?s expectations. Overall wireless revenue was up 7.3% to $19 billion, and wireless service revenue was up 7.5% to $16.2 billion.

On the customer side, Verizon added 1.5 million postpaid connections, including 3.1 million iPhones. This is the highest quarterly activation number in four years, and brings the total subscriber base to nearly 96 million. The iPhone represented 46% of the total smartphone activations, 6.4 million in total. The new iPhone 5 made up 21% of total Apple activations, and about 650,000 sold during the final week of the quarter. 3.4 million Android smartphones were part of that 6.4 million, and 3 million were LTE-enabled.

Churn remained low at 0.91%, and modest growth of average revenue per account (ARPA) was realized, with the a bump from $143.32 to $145.42 in quarter of quarter results. With the introduction of new mobile share data plans, the ARPU is no longer relevant for Verizon, and will now focus on reporting account-based revenues.

53 percent of customers are now using smartphones, and 35 percent of all data traffic on the network now runs over LTE. 4G LTE service now available to more than 250 million people in 419 markets across the U.S.

Press Release:

Verizon Reports Third Consecutive Quarter of Double-Digit Earnings Growth, Continued Strong Cash Flow

Verizon Wireless Again Posts Record-High Margin, Supported by Strong Service Revenues; Wireline Consumer Revenue Growth Continues to Accelerate

NEW YORK,?Oct. 18, 2012?/PRNewswire/ ?

3Q 2012 HIGHLIGHTS

Consolidated

  • 56 cents?in diluted earnings per share (EPS), compared with?49 cents?per share in 3Q 2011 ? a 14.3 percent increase.
  • 64 cents?per share in adjusted EPS (non-GAAP), which excludes?8 cents?per share in charges, compared with?56 cents?in adjusted EPS in 3Q 2011 ? a 14.3 percent increase.

Wireless

  • 7.5 percent year-over-year increase in service revenues in 3Q 2012; 7.9 percent year-over-year increase in retail service revenues; 31.8 percent operating income margin and 50.0 percent segment EBITDA margin on service revenues (non-GAAP), both record highs.
  • 1.8 million retail net additions, excluding acquisitions and adjustments, including 1.5 million retail postpaid net connections; low retail postpaid churn of 0.91 percent; 95.9 million total retail connections, 90.4 million total retail postpaid connections.
  • 4G LTE service now available to more than 250 million people in 419 markets across the U.S.

Wireline

  • 4.6 percent year-over-year increase in consumer revenues, the highest in a decade; consumer ARPU (average revenue per user) up 10.3 percent year over year, to?$103.86.
  • 136,000 FiOS Internet and 119,000 FiOS Video net additions, with continued increased sales penetration for both products; 5.3 million total FiOS Internet, 4.6 million total FiOS Video customers.

Verizon Communications Inc. (NYSE, Nasdaq: VZ) today reported a third consecutive quarter of double-digit percentage growth in year-over-year earnings, as Verizon Wireless generated a second consecutive quarter of record-high margins and Verizon?s Wireline segment posted accelerated growth in consumer revenues.

Verizon reported?56 cents?in EPS in third-quarter 2012, an increase of 14.3 percent compared with third-quarter 2011 earnings of?49 cents?per share.

Adjusted third-quarter 2012 earnings (non-GAAP) of?64 cents?per share exclude?8 cents?per share for charges related to patent litigation settlements.? Comparable adjusted third-quarter 2011 earnings of?56 cents?per share excluded?7 cents?per share for a non-operational charge related to an actuarial valuation of pension plans.

On Track to Meet 2012 Financial Objectives
?In the third quarter, Verizon continued to deliver double-digit earnings growth and strong cash generation, and we remain solidly on track to meet our financial objectives for the year,? said?Lowell McAdam, Verizon chairman and CEO.? ?With our 4G LTE network advantage, well-received Share Everything Plans and unmatched product portfolio, Verizon Wireless continues to do an outstanding job of balancing growth and profitability.? Wireless achieved record profitability in a quarter in which we reported the highest number of retail postpaid gross and net adds in four years.?

McAdam added: ??Based on the strength of our FiOS fiber-optic network, we reported the highest growth in U.S. consumer wireline revenues in 10 years.? Additionally, strategic services growth in our Enterprise business helped offset weaker revenues caused by global economic challenges.? We are confident that we have the right plans in place to meet these challenges while improving the long-term profitability in both Consumer and Enterprise.?

Continued Strong Revenue Growth; Year-to-Date Free Cash Flow Up 49.9 Percent
In third-quarter 2012, Verizon?s total operating revenues were?$29.0 billion?on a consolidated basis, an increase of 3.9 percent compared with third-quarter 2011.

Consolidated operating income was?$5.5 billion?in third-quarter 2012, compared with?$4.6 billion?in third-quarter 2011.? Consolidated EBITDA (non-GAAP, earnings before interest, taxes, depreciation and amortization) totaled?$9.65 billion?in third-quarter 2012, compared with?$8.8 billion?in third-quarter 2011.

Cash flow from operating activities totaled?$24.8 billion?in the first nine months of 2012, compared with?$21.5 billion?in the first nine months of 2011.

With capital expenditures of?$11.3 billion?in the first nine months of 2012, free cash flow (non-GAAP, cash flow from operations less capex) was$13.4 billion?through third-quarter 2012, compared with?$9.0 billion?through third-quarter 2011 ? an increase of 49.9 percent.

For full-year 2012, capital expenditures are expected to be lower than 2011 capital expenditures of?$16.2 billion.

Verizon Wireless Results: Record Profitability, Strong Customer and Revenue Growth
In third-quarter 2012, Verizon Wireless delivered the highest number of retail postpaid net additions in four years; strong growth in revenues; an increase in smartphone penetration; and the highest segment EBITDA margin on service revenues (non-GAAP) in the company?s history, surpassing last quarter?s previous high.

Wireless Financial Highlights

  • Service revenues in the quarter totaled?$16.2 billion, up 7.5 percent year over year.? Retail service revenues grew 7.9 percent year over year, to?$15.5 billion.
  • Total revenues were?$19.0 billion, up 7.3 percent year over year.
  • Retail postpaid ARPA (average revenue per account) grew 6.5 percent over third-quarter 2011, to?$145.42?per month. ?Following the recent introduction of the Share Everything Plan and as customers continue to add multiple devices to accounts, Verizon Wireless now reports ARPA instead of ARPU since customers can share data among multiple devices.
  • Wireless operating income margin was 31.8 percent and segment EBITDA margin on service revenues (non-GAAP) was 50.0 percent, setting record highs for the second consecutive quarter.

Wireless Operational Highlights

  • Verizon Wireless added 1.8 million retail net connections in the third quarter, including 1.5 million retail postpaid net connections, the highest in four years.? These additions exclude acquisitions and adjustments.
  • At the end of the third quarter, the company had 95.9 million retail connections, a 5.7 percent increase year over year, including 90.4 million retail postpaid connections.
  • Verizon Wireless had 34.8 million retail postpaid accounts at the end of the third quarter, a 1.0 percent increase over the third quarter 2011, and an average of 2.6 connections per account, up 4.0 percent year over year.
  • At the end of the third quarter, smartphones constituted more than 53 percent of Verizon Wireless? retail postpaid customer phone base, up from 50 percent at the end of second-quarter 2012.
  • Retail postpaid churn was 0.91 percent in the third quarter, an improvement of 3 basis points year over year. Total retail churn was 1.18 percent in the third quarter, an improvement of 8 basis points year over year.
  • Verizon Wireless continued to roll out its 4G LTE mobile broadband network, the largest 4G LTE network in the U.S.? As of today (Oct. 18), Verizon Wireless 4G LTE service is available to more than 250 million people in 419 markets across the U.S.
  • The company introduced seven 4G LTE smartphones in third-quarter 2012: the DROID Incredible 4G LTE by HTC, Samsung Galaxy S III, Pantech Marauder, Intuition by LG, Samsung Galaxy Stellar, DROID RAZR M by Motorola, Apple iPhone 5; and one 4G LTE tablet, the Samsung Galaxy Tab 2.? The company also announced the availability of the DROID RAZR HD and the RAZR MAXX HD by Motorola, which are launching today.
  • After receiving FCC approval in late August, Verizon Wireless purchased AWS spectrum from SpectrumCo and Cox Communications, and also completed its spectrum transactions with T-Mobile?USA?Inc., Leap Wireless and Savary Island Wireless.

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Source: http://thecellphonejunkie.com/2012/10/18/verizon-reports-q3-2012-results-profits-and-revenue-increase/

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