Thursday, July 18, 2013

Verizon Delivers Strong Q2, Increases CAPEX

Verizon reported Q2 2013 operating revenues of $29.8 billion, up 4.3 percent year-over-year, while operating income increased 16.0 percent, to $6.6 billion, compared with $5.7 billion in second-quarter 2012.  Cash flow totaled $17.1 billion in first-half 2013, compared with $15.3 billion in first-half 2012.  Capital expenditures in first-half 2013 were $7.6 billion, compared with $7.4 billion in first-half 2012.


“Verizon’s consistent strategic investments in wireless, FiOS and global networks drove strong financial performance in the first half of 2013,” said Lowell McAdam, Verizon chairman and CEO.  “Having posted double-digit earnings growth in five of the last six quarters, we are focused on continuing to provide the best portfolio of products on the most reliable networks; capturing incremental revenue growth in broadband, video and cloud services; and sustaining our earnings and cash-flow momentum.” - See more at: http://newscenter.verizon.com/corporate/news-articles/2013/07-18-verizon-reports-2013-2q-earnings/#sthash.vQx0uaSH.dpuf

Verizon is increasing its capital spending guidance from $16.2 billion to between $16.4 billion and $16.6 billion for full-year 2013.  The company said it anticipates higher demand for wireless data consumption as it begins deployment of AWS (advanced wireless services) spectrum in second-half 2013.

Some highlights:

Wireless

Total revenues were $20.0 billion in second-quarter 2013, up 7.5 percent year over year.  Service revenues in the quarter totaled $17.1 billion, up 8.3 percent year over year.  Retail service revenues grew 7.8 percent year over year, to $16.4 billion.

Verizon Wireless added 941,000 retail postpaid net connections, out of a total 1.0 million net retail connections, in the second quarter.  These additions exclude acquisitions and adjustments.  Verizon expects to continue to see increases in quarterly sequential net additions for retail postpaid connections in the second half of 2013. At the end of the second quarter, the company had 100.1 million retail connections, a 6.3 percent increase year over year -- including 94.3 million retail postpaid connections.

Smartphones accounted for 64% of the retail postpaid customer base at the end of Q2 - up from 61% at the of Q1.

Wireline

Consumer revenues were $3.6 billion, an increase of 4.7 percent compared with second-quarter 2012.  Consumer ARPU for wireline services increased to $109.67 in second-quarter 2013, up 9.4 percent compared with second-quarter 2012.

FiOS revenues grew 14.7 percent, to $2.7 billion in second-quarter 2013, compared with $2.4 billion in second-quarter 2012.  ARPU for FiOS customers continued to be more than $150 in second-quarter 2013.  Verizon added 161,000 net new FiOS Internet connections and 140,000 net new FiOS Video connections in second-quarter 2013.  Verizon had a total of 5.8 million FiOS Internet and 5.0 million FiOS Video connections at the end of the quarter, representing year-over-year increases of 12.2 percent and 12.6 percent, respectively.

Broadband connections totaled 8.9 million at the end of second-quarter 2013, a 1.9 percent year-over-year increase.  Overall, net broadband customers increased 45,000 in the second quarter, as FiOS Internet net customer additions more than offset a decline in subscribers for DSL-based High Speed Internet services. Verizon has been replacing high-maintenance portions of its residential copper network with fiber optics to provide enhanced services and to reduce ongoing repair costs.  In first-half 2013, Verizon migrated 169,000 homes to fiber, toward a target of 300,000 migrations within FiOS markets in 2013.

Sales of strategic services to global enterprise customers increased 4.8 percent compared with second-quarter 2012 and represented 57 percent of total enterprise revenues, compared with 52 percent in second-quarter 2012.  Strategic services include cloud and data center services, security and IT solutions, advanced communications, strategic networking and telematics services.

http://newscenter.verizon.com/corporate/news-articles/2013/07-18-verizon-reports-2013-2q-earnings/

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