Verizon Communications Inc reported on Tuesday its quarterly revenue grew 3.4 per cent, slightly faster than analysts estimated, as it added more subscribers than expected at its Verizon Wireless venture with Vodafone Group Plc.
Verizon, which has agreed to buy Vodafone’s 45 per cent share in their venture for $130-billion, said the wireless business added 1.6 million subscribers in the quarter, compared with the 1.5 million average expectation of five analysts contacted by Reuters.
Verizon Wireless, the first of the big U.S. mobile operators to report fourth-quarter earnings, competes in a market where competition is rapidly intensifying.
The No. 2 mobile operator AT&T Inc and No. 4 ranked T-Mobile U.S. have been directly advertising to each others’ customers and No. 3 mobile service Sprint Corp has also weighed in with service price discounts for family plans.
Verizon shares rose 0.8 per cent in premarket trading after reporting that it earned $5.07-billion, or $1.76 per share, in the fourth quarter, compared to a loss of $4.23-billion, or $1.48 per share, in the year-ago period, including pension-related charges in both quarters.
Excluding unusual items, its earnings per share of 66 cents beat Wall Street expectations by a penny.
Verizon Wireless’s profit margin was 47 per cent in the quarter based on earnings before interest, tax, depreciation and amortization, and beat the expectation of four analysts for a margin closer to 46 per cent.
Revenue increased to $31.1-billion from $30.05-billion a year earlier. Wall Street expected $31.02-billion, according to Thomson Reuters I/B/E/S.
The company said wireless customer defections, known in the industry as churn, increased slightly from the year-ago quarter but fell from the third quarter.
On the wireline side, it said it added 92,000 FiOS video customers and 126,000 net new FiOS Internet connections in the quarter.
Earlier on Tuesday, Verizon said it had agreed to buy Internet television assets from chip maker Intel Corp but did not disclose the terms of the deal.
Intel’s TV project, called OnCue, had faced challenges getting off the ground since it was officially unveil in February last year. The chipmaker’s new CEO, Brian Krzanich, ultimately decided Intel could not afford the distraction and expense, sources familiar with the decision told Reuters in late 2013.
Verizon shares rose to $48.73 in premarket trading after closing at $48.35 in the regular New York Stock Exchange session. Its deal with Vodafone is expected to close in late February.