NEW YORK—On Monday, telecom giant Verizon Communications Inc. announced that its second quarter earnings fell by 21 percent and that it plans to cut 8,000 jobs.
Verizon is the second-biggest mobile carrier in the United States after AT&T Wireless.
Verizon reported earnings of $1.48 billion, compared to $1.88 billion from the second quarter of 2008. Diluted earnings per share (EPS) were 52 cents per share compared with 66 cents per share last year. The results were mainly caused by an increase of 14.6 percent in operating expenses compared to the 2008 second quarter.
In response, the company announced that it will discharge 8,000 workers and contractor workers. All the dismissals will be from the wireless business, a joint venture with U.K.’s Vodafone Group.
The company’s total operating revenues grew 11.3 percent to $26.9 billion, compared with the 2008 second quarter, among others as a result of revenues from the acquisition of Alltel Corporation in January of 2009.
In the wireless domain, Verizon added 1.1 million net customers—less than the 1.4 million rival AT&T gained—and has 85.2 million retail customers, up 27.8 percent.
“Verizon posted continued strong wireless revenue growth and new levels of sales success with FiOS in the second quarter,” said Verizon Chairman and CEO Ivan Seidenberg, in a statement. Verizon added 300,000 net new FiOS TV customers and a record 303,000 net new FiOS Internet customers, for a total of 2.5 million FiOS TV customers and 3.1 million FiOS Internet customers.
FiOS is competing with traditional cable companies for digital television and telephone services.
”This resilience in consumer demand for our wireless, broadband and video products has again produced overall revenue growth despite cyclical impacts, especially in business markets,” said Seidenberg.
AT&T reported last week second-quarter results highlighted by strong wireless growth, driven by the successful iPhone 3GS launch, which started June 19. AT&T iPhone activations totaled more than 2.4 million, with more than a third of those activations for customers who were new to AT&T.
Denny Strigl, the president & COO of Verizon, said this about its competitors, “So clearly the iPhone has been a successful device which for us has expanded the overall smartphone market,” in a conference call with analysts.
“PDA’s and smartphone sales remained strong representing about 40 percent of new device sales this quarter”, said CFO John Killian in the conference call. “Continued growth in PC cards despite some cyclical effects and new products like netbooks, and MiFi devices are also helping to expand the mobile broadband market.”
Strigl concluded that, “The pipeline of products we have coming I think leave us in a strong position. Yes we did see an uptick in the last couple of weeks of June, no question about that. But I think we’re extremely well positioned going forward.”
Verizon is the second-biggest mobile carrier in the United States after AT&T Wireless.
Verizon reported earnings of $1.48 billion, compared to $1.88 billion from the second quarter of 2008. Diluted earnings per share (EPS) were 52 cents per share compared with 66 cents per share last year. The results were mainly caused by an increase of 14.6 percent in operating expenses compared to the 2008 second quarter.
In response, the company announced that it will discharge 8,000 workers and contractor workers. All the dismissals will be from the wireless business, a joint venture with U.K.’s Vodafone Group.
The company’s total operating revenues grew 11.3 percent to $26.9 billion, compared with the 2008 second quarter, among others as a result of revenues from the acquisition of Alltel Corporation in January of 2009.
In the wireless domain, Verizon added 1.1 million net customers—less than the 1.4 million rival AT&T gained—and has 85.2 million retail customers, up 27.8 percent.
“Verizon posted continued strong wireless revenue growth and new levels of sales success with FiOS in the second quarter,” said Verizon Chairman and CEO Ivan Seidenberg, in a statement. Verizon added 300,000 net new FiOS TV customers and a record 303,000 net new FiOS Internet customers, for a total of 2.5 million FiOS TV customers and 3.1 million FiOS Internet customers.
FiOS is competing with traditional cable companies for digital television and telephone services.
”This resilience in consumer demand for our wireless, broadband and video products has again produced overall revenue growth despite cyclical impacts, especially in business markets,” said Seidenberg.
AT&T reported last week second-quarter results highlighted by strong wireless growth, driven by the successful iPhone 3GS launch, which started June 19. AT&T iPhone activations totaled more than 2.4 million, with more than a third of those activations for customers who were new to AT&T.
Denny Strigl, the president & COO of Verizon, said this about its competitors, “So clearly the iPhone has been a successful device which for us has expanded the overall smartphone market,” in a conference call with analysts.
“PDA’s and smartphone sales remained strong representing about 40 percent of new device sales this quarter”, said CFO John Killian in the conference call. “Continued growth in PC cards despite some cyclical effects and new products like netbooks, and MiFi devices are also helping to expand the mobile broadband market.”
Strigl concluded that, “The pipeline of products we have coming I think leave us in a strong position. Yes we did see an uptick in the last couple of weeks of June, no question about that. But I think we’re extremely well positioned going forward.”
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