Verizon lowers guidance

Verizon said that merger-related expense savings and cost-control measures enabled the company to increase cash expenses by only 1.7% during the quarter. In the domestic telecom unit, cash expenses decreased 3.5% from one year ago.

“We are taking expense savings that will stick to the ribs,” Salerno said. “We are taking costs out of the business that will not be there when the recovery occurs.”

Verizon’s revenues rose about 5% in the second quarter to $16.9 billion, excluding the impact of overlapping wireless properties.

Verizon added 120,000 DSL subscribers in the second quarter compared with 180,000 in the first quarter. The carrier attributed the slowdown to new pricing and regulatory requirements, as well as a transition to a separate data affiliate in California. Verizon did not change its year-end goal of 1.2 million to 1.3 million DSL subscribers.

Verizon’s success in winning long-distance customers continued during the quarter, as the company added 804,000 customers, including 253,000 in its newest market, Massachusetts. Verizon now has 6 million long-distance customers nationwide, and increased its growth target for the year to between 6.7 million to 6.9 million customers, compared with the previous range of 6.4 million to 6.6 million.

As previously announced, Verizon Wireless netted 808,000 new customers in the quarter, a 12.7% increase from last year. Service revenues per subscriber increased 3.7% to $49, and Mobile Web and Mobile IP data services subscribers grew to 1.1 million.