Verizon third-quarter earnings, revenue beat Wall Street estimates

Thu Oct 17, 2013 7:53pm EDT
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By Sinead Carew

NEW YORK (Reuters) - Verizon Communications Inc on Thursday posted stronger- than-expected third-quarter earnings and revenue driven by wireless growth, sending its shares up 4 percent.

While wireless customer growth was slightly below Wall Street estimates, its Verizon Wireless venture with Vodafone Group Plc posted good profit and revenue growth as customers spent more on data services. Verizon has agreed to buy out Vodafone's 45 percent share of the venture.

The subscriber shortfall caused some concern that the company, the first U.S. telephone operator to report this quarter, was losing market share to rivals such as T-Mobile US Inc.

New Street analyst Jonathan Chaplin said that while Verizon's financials were "outstanding," "there were clear signs that a resurgent TMUS is impacting even Verizon."

Chief Financial Officer Fran Shammo conceded some lower-spending customers moved to rival services in the quarter even as he told analysts on the company's quarterly conference call that "we continue to gain market share."

Instead, he blamed the subscriber shortfall on shortage of Apple Inc's iPhone 5S. About one-half of the Verizon Wireless smartphone activations were iPhones, representing roughly 3.9 million iPhone activations.

"The shortage on the 5S was a significant issue for the quarter," Shammo told Reuters in an interview.

The executive said that 8.4 percent service revenue growth at Verizon Wireless was sustainable in the short term but expected the growth rate to decline in the future.   Continued...

A Verizon Wireless store is shown in Del Mar, California in this June 6, 2013 file photograph. REUTERS/Mike Blake /Files