Results Include Costs for Voluntary Workforce Reductions, as Prior Cost- Reduction Initiatives Gain Momentum and Strategic Divestitures Are Completed
NEW YORK , July 23 /PRNewswire/ --
2Q HIGHLIGHTS
Consolidated
* $9.8 billion in cash flow from operations during 2Q 2010, up 29.8 percent from 2Q 2009; $5.5 billion in free cash flow (non-GAAP), up 76.7 percent.
* A loss of 7 cents per share, including 65 cents of earnings per share in adjustments, compared with 2Q 2009 EPS of 52 cents.
Wireless
* 1.4 million total net customer additions, excluding divestitures and adjustments, in 2Q 2010; 665,000 retail postpaid net customer additions in the quarter; continued low retail postpaid churn of 0.94 percent.
* 86.2 million retail customers; 92.1 million total customers, after divestitures and conforming adjustments related to the Alltel acquisition.
* 3.4 percent increase in total revenues from 2Q 2009; 5.2 percent increase in service revenues; data revenues up 23.8 percent; 30.3 percent operating income margin and 47.5 percent Segment EBITDA margin on service revenues (non-GAAP).
Wireline
* 196,000 net FiOS Internet and 174,000 net FiOS TV customer additions; 3.8 million total FiOS Internet customers and 3.2 million total FiOS TV customers.
* 11.4 percent increase in consumer ARPU from 2Q 2009; total broadband and video revenues of $1.8 billion, up 20.1 percent from 2Q 2009.
* 6.2 percent increase in strategic business services revenues; total global enterprise revenues up 0.6 percent from 2Q 2009.
For second-quarter 2010, Verizon Communications Inc. (NYSE, Nasdaq: VZ) reported continued strong cash flow growth, coupled with improved margins for both its Wireless and Wireline business segments, and improved revenue trends for sales to global business customers.
The company reported a loss of 7 cents in basic earnings per share (EPS) in the quarter, which included $2.3 billion in pre-tax costs for workforce reductions associated with a second-quarter incentive offer that will lead to approximately 11,000 voluntary separations this year. This compares with earnings of 52 cents per share in the second quarter of 2009.
'Solid Improvement in Operational Results'
"Verizon showed solid improvement in operational results in the quarter," said Chairman and CEO Ivan Seidenberg. "In addition, the wireline spinoff to Frontier on July 1 improves our future growth profile. We see the opportunity to create additional shareholder value with a revenue portfolio that is now more heavily focused on wireless, FiOS and global IP."
Seidenberg added, "We have the network platforms in place, and the product and service innovations in the pipeline, to fuel the next generation of growth in our changing industry. Our cost-reduction efforts are gaining momentum, and trends in the global business market are showing signs of stabilization."
Consolidated Results Include Divestitures
Verizon's consolidated second-quarter 2010 results include wireline local exchange businesses covering 4 million access lines that were spun off and merged with Frontier Communications on July 1. Results also include certain wireless properties until they were divested in April and June to comply with conditions imposed in connection with regulatory approvals of last year's acquisition of Alltel. These wireless properties, covering more than 2 million customers, were held in a trust through the date of divestiture.
Items that negatively impacted Verizon's second-quarter 2010 net income were 52 cents per share associated with the voluntary incentive program for union-represented employees, about two-thirds of whom left the payroll in late June or early July; 6 cents per share for both Alltel merger integration costs and taxes associated with the divestiture of the Alltel trust properties; 4 cents per share in Frontier spinoff-related charges; and 3 cents per share for a one-time, non-cash revenue adjustment of $268 million, which was recorded to properly defer previously recognized wireless data revenues that will be earned and recognized in future periods.
Verizon's total operating revenues were $26.8 billion in second-quarter 2010, a decrease of 0.3 percent compared with second-quarter 2009.
Cash flow from operations totaled $16.9 billion in the first half of 2010, compared with $14.1 billion in the first half of 2009. Cash flow from operations totaled $9.8 billion in second-quarter 2010 alone, up 29.8 percent compared with second-quarter 2009.
Capital expenditures totaled $4.2 billion in the second quarter of 2010, down 3.6 percent from second-quarter 2009. Full-year 2010 guidance for capital expenditures remains in the range of $16.8 billion to $17.2 billion. In second-quarter 2010, free cash flow (non-GAAP; cash flow from operations less capital expenditures) totaled $5.5 billion, a 76.7 percent year-over-year increase.
Verizon's net debt (non-GAAP; total debt less end-of-period cash and cash equivalents) was $52.7 billion at the end of second-quarter 2010. The net debt to Adjusted EBITDA ratio (non-GAAP; net debt divided by earnings before interest, taxes, depreciation and amortization adjusted for non-recurring or one-time items) was approximately 1.5 at the end of the quarter, and Verizon expects it to be lower by year-end 2010.
Wireless Momentum Continues:
Top-Line Revenue Growth, Strong Profitability, Low Retail Postpaid Churn
Verizon Wireless continued to deliver strong margins and data revenue growth, and solid customer additions. In the second quarter of 2010:
* Verizon Wireless added 665,000 retail postpaid and 454,000 total retail customers in the quarter, excluding divestitures and adjustments, both increases over the first quarter of 2010.
* At the end of the second quarter, the company had 86.2 million retail customers, which represented nearly 94 percent of the company's wireless customers, the largest number of retail customers of any U.S. wireless provider.
* The company also added 896,000 reseller customers in the second quarter.
* The total number of customers at the end of the quarter was 92.1 million, after adding 1.4 million total net customers in the quarter and removing a net 2.1 million customers in connection with divestitures and conforming adjustments related to the Alltel acquisition.
* In addition, the company had 7.7 million "other connections" at the end of the quarter -- such as machine-to-machine, eReaders and telematics -- adding 264,000 net other connections in the quarter. This brings the number of total wireless connections to 99.7 million at the end of the second quarter.
* Retail postpaid churn, retail churn and total customer churn remained low, at 0.94 percent, 1.33 percent and 1.27 percent, respectively. All are the company's best levels in nearly two years.
* Retail service revenues in the quarter totaled $13.5 billion, up 4.2 percent year over year. Retail data revenue was up 23.4 percent to $4.7 billion. Service revenues in the second quarter were $14.0 billion, up 5.2 percent. Total revenues were $16.0 billion, up 3.4 percent year over year.
* Retail service ARPU (average monthly service revenue per user) grew 0.9 percent over the second quarter of 2009 to $51.56. Retail data ARPU increased to $17.85, up 19.4 percent year over year.
* Wireless operating income margin was 30.3 percent, an increase of 150 basis points, or 1.5 percentage points, year over year. Segment EBITDA margin on service revenues (non-GAAP) was 47.5 percent, up 120 basis points over second-quarter 2009.
Click to read the full press release
No comments:
Post a Comment