FiOS Growth Slows for Verizon
Verizon Communications reports mixed Q2 earnings.
By Robert Marich -- Broadcasting & Cable, 7/28/2008 7:28:00 AM
Verizon Communications FiOS TV video-subscriber growth decelerated in the second quarter, as the telco giant reported mixed earnings Monday with strong cell-phone-segment performance.
In the three months ended June 30, the telco reported net adds of 176,000 FiOS video subscribers, down from the 225,000-280,000 analysts projected. That’s down from a net gain of 263,000 in the first quarter and barely up from a gain of 167,000 in the same quarter a year earlier. Verizon finished the quarter with 1.382 million FiOS subscribers, up from 1.206 million in the first quarter of 2008 and up from 515,000 a year ago.
“FiOS was … disappointing,” noted a report from Sanford C. Bernstein, which said video subscribers increased 25% in the quarter while the video footprint enlarged 33%. Still, Verizon said broadband and video revenues from consumer customers totaled more than $1 billion in the second quarter, representing growth of 53% from a year ago.
Corporate net income rose in the second quarter to 66 cents per share, or $1.88 billion, from 58 cents, or $1.68 billion. That’s about two cents per share above analysts’ forecasts. Revenue climbed 3.7% to $24.1 billion.
The upward trajectory of earnings, plus an upbeat outlook, gave investors reasons to cheer.
“We don’t expect any significant financial impact on our results in the second half of the year," Verizon chief operating officer Dennis Strigl said in a conference call.
Verizon’s operating margin -- a barometer of core profitability -- rose to 19% from 18% a year ago when adjusted for onetime items.
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