Hawaiian Telcom sale
lifts Verizon’s earnings
Star-Bulletin news services
Verizon Communications, the country's largest phone carrier, said yesterday that its profits rose 18 percent in the second quarter, lifted by the sale of its operations in Hawaii and continued growth in the company's wireless group.
Verizon earned $2.1 billion, or 75 cents a share, compared with $1.8 billion, or 64 cents a share, in the same quarter last year. Stripping out the 12 cents a share from the sale of the Hawaii phone business, Verizon earned 63 cents a share, a penny less than Wall Street analysts had expected.
The results, reported before the markets opened, continue a familiar theme for Verizon and the other Bell operating companies, which rely heavily on their mobile phone businesses and their broadband products for growth.
Verizon's fixed line business continued its sharp decline. It lost 518,000 wire-line subscribers compared with the previous quarter, as more customers chose to replace traditional phones with cell phones. During the second quarter, Verizon's sales grew 4.6 percent, to $18.6 billion, excluding the proceeds from the sale of Verizon Hawaii to the Carlyle Group for $1.6 billion. That deal closed in May and the company is now called Hawaiian Telcom.
Verizon Wireless, which Verizon owns with Vodafone, added a record 1.9 million new subscribers in the quarter. The company now has 47.7 million customers, second to Cingular Wireless. Revenue from the mobile service jumped 14.6 percent, to $7.8 billion, the 12th consecutive quarter of double-digit growth.
"Wireless is just tearing it up," said Edward Snyder, an analyst at Charter Equity Research who does not have a position on Verizon's stock.