Verizon Profit Up Again as Strike Enters 2nd Week

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Verizon Communications Thursday reported nearly $32.2 billion in operating revenue for first-quarter 2016, below Wall Street expectations, with 98,000 FiOS Internet and 36,000 FiOS video net additions.

That revenue number was a slight increase (.6 percent) from the same quarter a year ago. Profit was more than $4.4 billion, up 2.1 percent from a year ago.

Verizon's Lowell McAdam“Verizon’s strong first-quarter results demonstrate our capacity to compete effectively, while executing on our plan of continued network leadership and seeding new growth markets in mobile video and the Internet of Things (IoT),” said Lowell McAdam, Verizon’s chairman and CEO.

Verizon said there will be “pressure on second-quarter earnings due to the timing of cost reductions,” related to the ongoing strike involving nearly 40,000 Verizon wireline employees from Massachusetts to Virginia. The strike now is in its second week.

Verizon is in the process of acquiring XO Communications’ fiber-optic network business, and has an agreement to deploy a new fiber platform in Boston. Both will support a mix of new technologies, including 5G wireless services, the telecom giant said.

Verizon also completed its sale of local landline businesses in California, Florida and Texas on April 1. The company used the proceeds to pay down debt in second-quarter 2016. In addition, Verizon recently announced plans to expand its video platform by adding content from Hearst and AwesomenessTV, and through a joint venture with Hearst to acquire Complex Media.{ad}

New revenue streams from IoT are growing, with revenue of about $195 million in the first quarter, a year-over-year increase of about 25 percent.

Verizon Wireless added 640,000 net retail postpaid subscribers, a 13 percent increase from the year-ago quarter. The additions exclude all wholesale connections, including IoT. At the end of the first quarter, Verizon had 112.6 million retail connections, a 3.7 percent year-over-year increase, and 107.2 million retail postpaid connections, a 4.4 percent year-over-year increase.

Growth in 4G device adoption is driving increased data and video use, according to Verizon. About 92 percent of the telecom’s total data traffic is on the LTE network. Overall data traffic on LTE has increased by about 50 percent year over year.

In the wireline segment, total FiOS revenue increased 5 percent to $3.5 billion compared to first-quarter 2015. That includes consumer FiOS revenue growth of 4.7 percent.

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