Verizon Wireless (NYSE:VZ) reported solid operating results for the second quarter, but the nation's largest carrier continued to see the pace of its postpaid subscriber additions slow down. Nevertheless, the company's earnings and growth were boosted by the addition of new smartphones such as the Motorola (NYSE:MOT) Droid X as well as from reseller customers.
Parent company Verizon Communications reported a net loss of $198 million, compared to a net profit of $1.48 billion in the year-ago quarter, as it was forced to book $2.3 billion in charges stemming from its ongoing buyout of around 11,000 employees. (Verizon Wireless is a joint venture between Vodafone and Verizon Communications.)
Here's a breakdown of the other key metrics:
Revenue: Verizon Wireless posted total revenue of $16 billion in the quarter, up 3.4 percent from $15.5 billion in the year-ago period. Service revenues in the quarter clocked in at $14 billion, up 5.2 percent from $13.3 billion in the second quarter of 2009. Verizon said retail data revenue was up 23.4 percent to $4.7 billion, a sharp jump from $3.9 billion in the second quarter last year. Wireless operating income margin stood at 30.3 percent, up 1.5 percent from the year-ago quarter.
Net adds: The carrier notched 1.4 million total subscriber additions in the quarter, bringing its subscriber base to 92.1 million. Verizon added added 665,000 lucrative retail postpaid customers in the quarter, outpacing rival AT&T Mobility's (NYSE:T) 496,000. However, Verizon also took in a larger number of reseller customers--896,000 to be precise. Verizon's network hosts TracFone's prepaid unlimited Straight Talk service.
ARPU: Retail average monthly revenue per user grew 0.9 percent in the quarter to $51.56. Retail data ARPU increased 19.4 percent over the year-ago period to $17.85.
Churn: Retail postpaid churn dipped to 0.94 percent, down from 1.07 percent in the first quarter. Total customer churn was 1.27 percent, better than 1.46 percent in the first quarter. Verizon said that both are the company's best levels in nearly two years.
Devices: Verizon said it has 7.7 million "other connections" at the end of the quarter--defined as machine-to-machine, ereaders and telematics--and added 264,000 net "other" connections in the quarter. Verizon said it had 99.7 million total wireless connections at the end of the second quarter.
Capital expenditures: Capital expenditures clocked in at $4.2 billion in the second quarter, down 3.6 percent from second quarter of 2009. Verizon is busy putting the finishing touches on its LTE network, which it will launch in 25-30 commercial markets sometime in the fourth quarter, covering 100 million POPs. Verizon said full-year 2010 guidance for capital expenditures remains in the range of $16.8 billion to $17.2 billion.
- see this release
- check out the FierceWireless Q2 earnings page
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