NEW YORK >> Phone giant Verizon Communications Inc. said today it earned $4.4 billion in the third quarter, largely from selling off assets and investments, and boasted that long-distance and wireless services were helping it overcome falling revenue from basic residential lines. Verizon earnings
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Verizon's third-quarter earnings more than doubled and the biggest U.S. local-telephone company predicted profit this year will be at the low end of its forecast.
Net income was $4.41 billion, or $1.60 a share, boosted by $2.8 billion in gains and tax benefits, Verizon said in a statement. Sales rose 1.2 percent to $17.2 billion. A year earlier, the company earned $1.88 billion, or 69 cents.
Chief Executive Ivan Seidenberg is slashing jobs, debt and network investment as customers switch to rivals such as AT&T Corp. for local-phone service and increasingly use mobile phones and e-mail.
Verizon is trying to overcome such trends by selling discounted packages of wireless calling, high-speed Internet access and long distance where regulators allow it. Verizon's long-distance customers are up 44 percent from last year, while digital subscriber lines (DSL) are up 70 percent.
Verizon said it has 7 percent more wireless subscribers than last year, at 31.5 million, despite losing 308,000 customers in the third quarter who had come onboard through a resale agreement with bankrupt rival WorldCom Inc. Verizon Wireless' closely watched "churn rate" -- the percentage of customers who leave the service in a given period -- was a relatively low 2.3 percent, up from 2.2 percent last year.
The company is forced by regulators to lease its network to rivals at discounted rates. Its phone lines fell for a sixth-straight quarter, dropping 3.6 percent to 58.6 million.
"That process is going to take several quarters, if not most of 2003, to reach stability," said Craig Nedbalski, managing director at Victory Capital Management Inc., owner of 7.9 million Verizon shares. Profit next year "is probably going to be pretty close to flat until we get some relief on below-cost, wholesale pricing."
Shares of Verizon closed down 32 cents at $36.57.