FiOS Spurs Verizon Double-Digit Earnings Growth in 2Q 2013

  • Verizon
  • Verizon Wireless
NEW YORK – Verizon Communications Inc. reported year-over-year double-digit percentage growth in operating income and earnings per share, as second-quarter 2013 results showed continued strong operating performance and customer demand for Verizon Wireless, FiOS and strategic enterprise services. FiOS revenues grew 14.7 percent, to $2.7 billion in second-quarter 2013, compared with $2.4 billion in second-quarter 2012.

Verizon reported 78 cents in EPS in second-quarter 2013, compared with 64 cents per share in second-quarter 2012. Second-quarter 2013 results include a non-cash, non-operational gain of 5 cents per share for an interim actuarial remeasurement associated with one of Verizon’s pension plans. Adjusted second-quarter 2013 earnings of 73 cents per share increased 14.1 percent, compared with 64 cents per share in second-quarter 2012, when there were no adjustments.

“Verizon’s consistent strategic investments in wireless, FiOS and global networks drove strong financial performance in the first half of 2013,” said Lowell McAdam, Verizon chairman and CEO. “Having posted double-digit earnings growth in five of the last six quarters, we are focused on continuing to provide the best portfolio of products on the most reliable networks; capturing incremental revenue growth in broadband, video and cloud services; and sustaining our earnings and cash-flow momentum.”

Wireline Reports Another Quarter of Strong FiOS Customer and Revenue Growth

Verizon’s Wireline segment reported another quarter of FiOS customer, market share and revenue growth, leading to continued growth in consumer revenues. In enterprise and wholesale, sales of global enterprise strategic services continued to increase and constitute a larger percentage of the revenue base.

Wireline Financial Highlights

  • Consumer revenues were $3.6 billion, an increase of 4.7 percent compared with second-quarter 2012. Consumer ARPU for wireline services increased to $109.67 in second-quarter 2013, up 9.4 percent compared with second-quarter 2012.

  • FiOS revenues grew 14.7 percent, to $2.7 billion in second-quarter 2013, compared with $2.4 billion in second-quarter 2012. ARPU for FiOS customers continued to be more than $150 in second-quarter 2013.

  • Sales of strategic services to global enterprise customers increased 4.8 percent compared with second-quarter 2012 and represented 57 percent of total enterprise revenues, compared with 52 percent in second-quarter 2012. Strategic services include cloud and data center services, security and IT solutions, advanced communications, strategic networking and telematics services.


Wireline Operational Highlights

  • Verizon added 161,000 net new FiOS Internet connections and 140,000 net new FiOS Video connections in second-quarter 2013. Verizon had a total of 5.8 million FiOS Internet and 5.0 million FiOS Video connections at the end of the quarter, representing year-over-year increases of 12.2 percent and 12.6 percent, respectively.

  • FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase. FiOS Internet penetration was 38.6 percent at the end of second-quarter 2013, compared with 36.6 percent at the end of second-quarter 2012. In the same periods, FiOS Video penetration was 34.5 percent, compared with 32.6 percent. The FiOS network passed 18.0 million premises by the end of second-quarter 2013.

  • By the end of second-quarter 2013, 35 percent of FiOS Internet customers subscribed to FiOS Quantum, which provides speeds ranging from 50 to 300 megabits per second.
    Broadband connections totaled 8.9 million at the end of second-quarter 2013, a 1.9 percent year-over-year increase. Overall, net broadband customers increased 45,000 in the second quarter, as FiOS Internet net customer additions more than offset a decline in subscribers for DSL-based High Speed Internet services.

  • Verizon has been replacing high-maintenance portions of its residential copper network with fiber optics to provide enhanced services and to reduce ongoing repair costs. In first-half 2013, Verizon migrated 169,000 homes to fiber, toward a target of 300,000 migrations within FiOS markets in 2013.

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