Merger costs lowered Verizon Communications Inc.s profit during the first quarter of 2006, the company reported on Tuesday, but wireless sales boosted its sales numbers.
Verizons acquisition of long-distance carrier MCI Inc. in January contributed to the RBOCs 7.1 percent earnings loss from the first quarter of 2005. First quarter 2006 earnings totaled $1.63 billion, or 56 cents per share, compared to $1.76 billion, or 63 cents per share, a year earlier.
Still, the company reported growth in its wireless and wireline broadband divisions. Verizon Wireless added 1.7 million new customers in the first quarter 2006, for a total of 53 million customers nationwide. The numbers are 16.7 percent higher than the first quarter of 2005. Customer churn totaled 1.18 percent, which Verizon said was a record low.
Meanwhile, Verizon added 541,000 wireline broadband connections during the first quarter of 2006. The company now claims 5.7 million such connections; that number includes DLS and FiOS, Verizons fiber-optic service. Following the MCI merger, Verizon’s wireline business segment includes both Verizon Telecom and Verizon Business formerly MCI. Total wireline operating revenue was $12.5 billion in the first quarter 2006, an increase of 33.3 percent compared with the first quarter 2005. Total wireline operating expenses were $11.4 billion in the first quarter 2006, a 40.6 percent increase compared with the first quarter 2005 on the same basis.
Verizon spent $4.1 billion in capital expenditures in the first quarter of 2006; those costs primarily were due to the MCI acquisition, and were up from $3.9 billion a year earlier. At the same time, Verizon said it is ahead of its goal to save $550 million in 2006, thanks to the MCI buy. The company said it will save money in part by cutting about 3,500 jobs this year.
Verizon Communications Inc. www.verizon.com