Verizon doubles profits
Verizon Communications doubled its third-quarter net profits off one-time gains and improved results in its wireless and long distance business. But its overall revenue increased only slightly, following the overall decline of its core access line business.
Verizon posted a net profit of $4.41 billion, up 135% from last year’s third quarter earnings of $2.3 billion. The net profit, however, includes $1.8 billion in asset sales and another $1 billion in tax benefits. Excluding the one-time items, Verizon’s profits came in at $2.11 billion, in line with analysts’ expectations.
CEO Ivan Seidenberg credited Verizon’s national breadth and its diversified service offerings as the reasons why Verizon has managed to move forward while the telecom industry falters.
“These results show that Verizon is executing effectively as we pull away from the pack in the telecom sector,” Seidenberg said. “We have demonstrated the ability to add customers and gain market share during troubled economic times.”
While results for broadband and long distance divisions excelled--44% year-over-year growth in long distance and 70% in DSL--Verizon said its domestic access line revenues decreased 1.8% to $10.2 billion and its total lines in service dropped 3.6%. Verizon CFO Doreen Toben, blamed this on increased competition in the local exchange market and took the opportunity to criticize regulators for what Verizon considers the current unfair competitive landscape.
Verizon reduced its capital expenditures to $2.6 billion for the quarter, bring its total capital spending for the first three quarters to $8.1 billion. The carrier also managed to reduce its debt by $6.8 billion to $51.8 billion.
Toben said Verizon expected its 2002 revenue to be even or down by 1% over 2001.
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