US-based Verizon Communications reported second-quarter earnings that satisfied analyst expectations and said its wireless arm would buy a rural mobile phone carrier to expand its reach, an Associated Press report said.
Investors found reasons to dislike the news, and the stock of the country's second largest telecommunications company fell 1.2%, to $41.51, even as the broader market rebounded from last week's losses, the Associated Press report added.
Verizon Wireless said it had agreed to buy Rural Cellular, which provides cell phone service in 15 states under the Unicel brand, for $757 million, or $45 per share.
Rural Cellular, based in Alexandria, Minn., has 716,000 subscribers.
The Associated Press report said most of its network is incompatible with Verizon Wireless' but compatible with AT&T and T-Mobile phones.
Verizon Wireless said it plans to move Rural Cellular's subscribers over to phones compatible with its network, but will maintain the older network for roaming by subscribers of other carriers.
Verizon is taking on about $1.9 billion in debt along with the acquisition, but said it expected the deal to save it $1 billion in roaming fees and operations expenses. Verizon sees the acquisition closing in the first half of next year.
The report said Verizon earned $1.68 billion from April through June, up 4.5% from $1.61 billion, in the same quarter last year.The latest per-share figure matched the average forecast of analysts polled by Thomson Financial, the report further said.