Growing Customer Base Boosts Verizon 1Q Profit by 9.8%

NEW YORK - Verizon Communications Inc.'s first-quarter earnings rose 9.8 percent as its wireless division attracted more customers than other carriers.

The country's second-largest telecommunications company earned $1.64 billion, or 57 cents per share, in the quarter that ended March 31, compared with $1.50 billion, or 51 cents per share, a year ago.

Revenue rose 5.5 percent to $23.8 billion from $22.6 billion.

Excluding items, earnings were 61 cents per share, matching the average expected by analysts polled by Thomson Financial. Analysts had expected revenue of $23.86 billion.

"Verizon has weathered the current economic uncertainty with strong first-quarter results," said Chairman and Chief Executive Ivan Seidenberg.

Analysts have been looking to the telecommunications companies to hold up well as the economy slows. AT&T Inc., Verizon's largest rival, bore that out with an earnings report last week that showed little sign of trouble.

Shares rose 71 cents to $37.75 in premarket trading.

Verizon Wireless added 1.5 million subscribers, beating AT&T, which added 1.3 million in the quarter. However, its growth rate was down from 1.7 million in the same quarter last year. Verizon Wireless still trails AT&T in the total number of subscribers, at 67.2 million compared with 71.4 million.

Verizon Wireless was the big spender in the government's spectrum auction, which ended in March. It paid $9.36 billion for airwaves that it plans to use to expand its data services next year.

Verizon Wireless is a joint venture between Verizon and Vodafone Group PLC of Britain, which owns 45 percent. While Verizon has operational control and all of the wireless revenue is counted in its report, 45 percent of the profits flow to Vodafone.

On the wireline side, the steep decline in phone lines continued. Verizon lost 8.2 percent of its lines from last year, ending with 40.5 million. Broadband connections were up 14.9 percent to 8.5 million. Total operating revenue in the segment, which included business services, declined 1.4 percent to $12.3 billion.

Verizon added 263,000 customers to its fiber-optic TV service in the quarter, for a total of 1.2 million. The service is Verizon's way of tackling the threat from cable companies that are siphoning off voice customers at a rapid pace.

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