Verizon Third
, co-owner of the largest U.S. wireless carrier, reported third-quarter profit that beat analysts' estimates after customers paid more for their mobile-phone subscriptions.
Earnings rose to 77 cents a share, excluding one-time expenses, the New York-based company said today in a statement. Analysts had estimated about 74 cents on average, according to data compiled by Bloomberg.
The company's mobile-phone business fueled gains in sales and profit, validating its decision last month to pay $130 billion for Vodafone Group Plc (VOD)'s share of the joint venture. By owning 100 percent of Verizon Wireless, the largest and most profitable U.S. wireless carrier, the company will keep all the earnings and give it more leeway to make network improvements.
While Verizon didn't add as many subscribers last quarter as analysts estimated, the quality and speed of its wireless network helped produce better results, said Kevin Roe, an analyst with Roe Equity Research LLC in Dorset, Vermont.
'Very solid,' he said. 'Despite subscriber net adds being a bit light and churn a bit higher, Verizon was able to still beat on wireless service revenue and margin.'
Verizon shares rose as much as 3.7 percent to $48.99 in early trading. The stock, up 9.2 percent this year, closed at $47.25 yesterday in New York.
Profit Gains
Third-quarter sales rose 4.4 percent to $30.3 billion, just above analysts' estimates for $30.2 billion. Net income attributable to Verizon climbed 40 percent to $2.23 billion, or 78 cents a share, from $1.59 billion, or 56 cents, a year earlier.
Verizon Wireless added 927,000 monthly contract users, compared with the average estimate of 1 million, according to a Bloomberg survey of 13 analysts. The average monthly bill for those customers rose 7.1 percent last quarter to $155.74, compared with the $154.63 analysts had predicted on average.
In addition to , the second-biggest U.S. wireless carrier, smaller rivals are trying to chip away at Verizon's dominance. was taken over in July by Tokyo-based SoftBank Corp. (9984), which provided a $5 billion cash infusion to improve the carrier's network. , meanwhile, has rolled out new services, such as an installment purchase plan for smartphones.
Verizon and AT&T also are in a race to attract heavy wireless Internet users. After AT&T beat Verizon in recent speed tests, Verizon has been refitting its network with faster gear in an effort to support its service quality claims.
The company announced its deal to buy out Vodafone's 45 percent stake in Verizon Wireless last month. To help fund the purchase, which is expected to be completed in the first quarter of next year, Verizon sold $49 billion in bonds -- the biggest company debt offering ever.
To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net
To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net
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