Verizon Communications Inc. today reported year-over-year double-digit percentage growth in operating income and earnings per share for the third consecutive quarter. Third-quarter 2013 results showed continued high customer demand for Verizon Wireless, FiOS and strategic enterprise services. Here are some highlights from today's report:
Consolidated- -78 cents in earnings per share (EPS), including a non-operational net gain of 1 cent per share, compared with 56 cents per share in 3Q 2012. -77 cents in adjusted EPS (non-GAAP), a 20.3 percent increase compared with adjusted EPS of 64 cents per share in 3Q 2012.
Wireless- -8.4 percent year-over-year increase in service revenues in 3Q 2013; 8.0 percent increase in retail service revenues; 33.8 percent operating income margin and 51.1 percent segment EBITDA margin on service revenues (non-GAAP). -Added 1.1 million net retail connections, including 927,000 net retail postpaid connections; low retail postpaid churn of 0.97 percent; 101.2 million total retail connections, 95.2 million total retail postpaid connections. -4G LTE service now available to more than 303 million people in more than 500 markets across the United States.
Verizon Wireless: Strong Profitability, and Customer and Revenue Growth
In third-quarter 2013, Verizon Wireless delivered consistently strong growth in retail postpaid net additions and revenues; an increase in smartphone penetration; and continued high segment EBITDA margin on service revenues (non-GAAP).
Wireless Financial Highlights
-Total revenues were $20.4 billion in third-quarter 2013, up 7.2 percent year over year. Service revenues in the quarter totaled $17.5 billion, up 8.4 percent year over year. Retail service revenues grew 8.0 percent year over year, to $16.8 billion. -Retail postpaid ARPA (average revenue per account) increased 7.1 percent over third-quarter 2012, to $155.74 per month. -In third-quarter 2013, wireless operating income margin was 33.8 percent, compared with 31.8 percent in third-quarter 2012. Segment EBITDA margin on service revenues was 51.1 percent, up 110 basis points over third-quarter 2012. -Verizon Wireless is on track to deliver 49 percent to 50 percent segment EBITDA margin on service revenues for the full year. Through the first three quarters of 2013, segment EBITDA margin on service revenues was 50.4 percent, with Verizon Wireless maintaining margins of 49 percent or higher in five of the past six quarters.
Wireless Operational Highlights
-Verizon Wireless added 1.1 million net retail connections, including 927,000 retail postpaid net connections, in the third quarter. These additions exclude acquisitions and adjustments. The company expects customer growth to increase sequentially in the fourth quarter.
-At the end of the third quarter, the company had 101.2 million retail connections -- a 5.5 percent increase year over year -- including 95.2 million retail postpaid connections.
-Verizon Wireless had 35 million retail postpaid accounts at the end of the third quarter -- an average of 2.7 connections per account. Nearly 42 percent of retail postpaid accounts are now on a Share Everything Plan, which allows customers to share data among multiple devices.
-At the end of the third quarter, smartphones accounted for more than 67 percent of the Verizon Wireless retail postpaid customer phone base, up from 64 percent at the end of second-quarter 2013.
-Retail postpaid churn was 0.97 percent in the third quarter, up 6 basis points year over year. Retail churn was 1.28 percent in the third quarter, up 10 basis points year over year.
-Verizon Wireless has substantially completed deployment of its 4G LTE network, covering more than 99 percent of its current 3G network footprint. The Verizon Wireless 4G LTE network is now available in more than 500 markets to 97 percent of the U.S. population and covers more than 303 million people, including those in areas served by the company's LTE in Rural America partners.
-The company continued to enhance its 4G LTE smartphone device lineup. In the third quarter, Verizon Wireless launched the HTC One, the DROID Mini, DROID Ultra and DROID Maxx, and the iPhone 5s and iPhone 5c. The company also launched a 4G LTE Broadband Router with Voice, which can be used to connect landline phones and wireless data devices simultaneously. In early October, the company launched the Samsung Galaxy Note 3.
-In August, Verizon Wireless introduced Verizon EDGE, an innovative device upgrade plan that spreads the retail price of a phone with no contract over 24 months. Customers can upgrade to a new phone after six months if 50 percent of the retail price has been paid.