Verizon Drops a Street Beat

Verizon Communications (NYSE:VZ) beat market expectations on both earnings and revenue for the first quarter, with good growth in data service revenues and a rise in average revenues per user for contract customers.

Earnings were $1.69 billion (59 cents per share), just slightly better than consensus expectations of 58 cents per share, but much better than the $1.44 billion (51 cents per share) reported for the same period last year. Revenues climbed to $28.24 billion against $26.99 billion last year; analysts expected $28.17 billion.

Chief Financial Officer Fran Shammo said Verizon Wireless, the company’s mobile venture, posted the highest growth in revenues over the past three years owing to rising smartphone usage. However, wireless customer growth slowed.

The company plans to introduce innovative ‘shared data service’ plans that would allow customers to run several devices under a single data service plan, and which should help growth in Verizon Wireless, according to Shammo.

Verizon Wireless added 501,000 new customers during the reported quarter, just marginally off the estimate of 511,000 customers made by a group of analysts polled by Reuters. The average revenue per user for contract customers grew by 3.6 percent to $55.43. Data service revenue improved 16 percent to $23.80.