Verizon Communications Reports 16% Rise in First-Quarter Profit

Verizon Communications Reports 16% Rise in First-Quarter Profit

Margins “record” in the mobile phone have made the jump to the first quarter earnings of U.S. telecom operator Verizon Communications, a new argument in favor of a buyout of its partner Vodafone in their joint mobile society.

Net income of Verizon jumped 15.8% in the first quarter to $ 1.95 billion, and earnings per share exceeded by 2 cents the average forecast of analysts, to 68 cents.

On Wall Street, it was climbing action Verizon 3.49% to $ 51.27 around 16:00 GMT.

The group noted that the results were “supported by record margins at Verizon Wireless”, the mobile phone company that owns 55-45 with Vodafone.

The operating EBITDA margin of mobile operations was 50.4% in the first quarter, in part according to some analysts with the lengthening of the time after which the phone subscribers are renewed.

The turnover in the mobile rose 6.8% to $ 19.5 billion. This represents two-thirds of the whole group, which increased its share from 4.2% to 29.42 billion dollars.

Verizon has invested heavily over the past five years to upgrade its mobile network, with shopping frequency or switching to the standard higher-speed fourth generation (4G) LTE.

The group claims to have experienced strong growth in the number of subscribers, and sees increasing penetration of smartphones.

These machines cost more in grants to mobile operators as a basic phone, but their users generally spend more because of the multiple functions of these devices, which explode their application in data volume.

Now 61% of mobile subscribers have a Verizon smartphone, up from 58% at the end of the previous quarter, said CFO Fran Shammo during a conference call with analysts.

He said that the group had activated 7.2 million new smartphones in the first quarter, including 4 million iPhones.

Analysts at Jefferies bank saw these latest figures a sign that sales of Apple’s flagship product, which will publish its results on Tuesday may have been “weak” in the first quarter. The action group also lost the apple 1.90% to $395.15.

In the fixed revenue of Verizon Communications fell overall by 1.2% to $ 9.8 billion, despite a good performance in high-speed fiber optic services (FiOS, 15%).

Shammo generally welcomed “a strong start to the year,” saying he wanted “to keep all this positive momentum throughout 2013 and 2014.”

Analysts at Citi bank have particularly felt in a note that the fundamentals of the mobile business should “remain strong over the next 12 months, despite the threat of increasing competition in the sector.”

The market for mobile telephony in the United States, so far mostly dominated by Verizon and other heavyweight AT & T, is completely remodeled. Japan’s Softbank and U.S. Satellite Dish bouquet battle for control of No. 3 Sprint Nextel sector, while the No. 4 T-Mobile USA is preparing to merge with MetroPCS.

Citi also highlights a possible takeover by Verizon from Vodafone Verizon Wireless “could have a positive effect on more important than what is reflected in the market price of Verizon profit.”

The CFO also reiterated Thursday that Verizon Communications was “very interested” in up to 100% in Verizon Wireless, saying “confident” that the operation can be performed without adverse effect in terms of taxation.



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