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Smartphone Saturation?: Verizon Profit, Revenue Dip

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Verizon reported a 10.2 percent drop in profit and a 6.7 percent drop in operating revenues for the third quarter, compared to the same quarter in 2015.

Operating revenue totaled $31 billion, down from $33.1 billion for the third quarter of last year and below analysts’ expectations. Profit was $3.74 billion, down from $4.17 billion for the year-ago quarter.

Verizon added 442,000 net retail postpaid wireless subscribers, excluding wholesale device and wholesale Internet of Things (IoT) connections. That total also was below analysts’ expectations. At the end of the quarter, Verizon had 113.7 million retail connections, a 2.6 percent year-over-year increase.

Wireline revenue was $7.8 billion, a 2.3 percent decrease compared to the year-ago quarter. Wireline operating income was $156 million, compared to a $109 million loss a year ago.{ad}

Total revenues for FiOS fiber-optic-based services grew 4.4 percent, to $2.8 billion, compared to third-quarter 2015. Rebounding from net-connection declines in the second quarter because of the wireline workers’ strike, Verizon added 90,000 FiOS Internet connections and 36,000 FiOS video connections during the quarter.

“Verizon continues to deliver strong financial and operational results in highly competitive markets while positioning itself for future growth,” said Lowell McAdam, Verizon’s chairman and CEO. “While we transform our company in a challenging environment, we have maintained the financial flexibility to invest in our industry-leading networks to better serve customers, add scale to bring innovation to the mobile media and Internet of Things (IoT) markets, and increase dividends for a 10th consecutive year.”

In July, Verizon announced an agreement to acquire Yahoo! and completed its acquisition of Telogis. In August, the telco announced an agreement to acquire Fleetmatics, a global provider of fleet and mobile workforce management offerings, in a transaction expected to close in the fourth quarter. And last month, it announced its acquisition of Sensity Systems, adding to its suite of smart city offerings when the transaction closed this month.

IoT revenues, led by telematics, totaled $217 million, a 24 percent increase compared to the year ago quarter.

Net phone additions decreased quarter-over-quarter by 36,000, as the gain in 4G phones was offset by a decline in basic and 3G phones. Tablet additions totaled 221,000 in the quarter. All other postpaid net additions totaled 257,000, primarily due to sales of hum, Verizon’s telematics device.


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