Verizon Wireless sold more than 2.3 million iPhone 4 handsets in a quarter also buoyed by the company's 4G LTE network and supporting Google Android handsets.
Apple's (NASDAQ:AAPL) iPhone 4 has been very good to
Verizon Wireless (NYSE:VZW), as the carrier
shipped 2.3 million of the popular devices and reported $1.61 billion, or 57
cents a share, in profit for the second quarter.
Verizon notched $3.6 billion in earnings for the quarter
on 57 cents earnings per share, with revenue of $27.53 million. The company
bested Wall Street analysis consensus of 55 cents per share and proved a marked
improvement over the 42 cents per share loss on $1.19 billion in earnings Verizon
posted in Q2 2010.
Verizon Chairman and CEO Ivan Seidenberg said the quarter
was one of the best in terms of earnings growth and revenue growth since the
"We expanded sequential margins in both our wireline
and wireless businesses, and in the second half of the year we expect Verizon
to build on this strong, positive momentum to continue to drive profitable,
sustainable growth," Seidenberg said.
Verizon reported 2.2 million wireless connections,
including 1.3 million retail postpaid subscribers. Citadel Securities said investors
"will likely be most pleased" by the postpaid new customers, which beat
analysts' expectation for 906,000 postpaid adds.
The biggest stories for Verizon include the iPhone 4 sales
momentum, as well as well as the expansion of its 4G LTE (Long Term Evolution)
network and associated handsets into new markets.
The company's 4G LTE service, which aims to facilitate data 10 times faster than the company's 3G network,
is available in 102 markets across the country, reaching more than 160 million
Verizon Wireless sold 1.2
million 4G LTE smartphones and Internet data devices, comprising mostly handsets based on Google's Android operating system.
Verizon sells the Android-based HTC
Thunderbolt 4G, Samsung Droid Charge and LG Revolution smartphones, in addition to the MiFi
4510L 4G LTE Mobile Hotspot from Novatel Wireless.
Citadel estimated Verizon sold 6.3 million total smartphones
in Q2. However, the equities firm noted that while Verizon's smartphone
penetration increased to 36 percent on a net increase of 3.2 million units,
this was less than the 3.4 million gain in Q1. As a result, Citadel warned
Verizon could miss its guidance for 2011.
"In other words, Verizon's smartphone momentum
slowed sequentially from Q1 to Q2. In contrast, AT&T's smartphone gains
accelerated (from 2.4MM in Q1 to 2.6MM in Q2), despite its significantly higher
smartphone base," Citadel noted. "Given this pace, we believe Verizon
is very unlikely to reach 50 percent smartphone penetration by year end, as
meanwhile. sold 3.6 million iPhones, but saw its profits drop 10 percent to $3.6
billion from $4 billion in net income from Q2 2010.
Verizon's Seidenberg, who has picked President and COO
Lowell McAdam to succeed him as CEO Aug. 1, said he expects Verizon Wireless to gain
share in the retail postpaid market throughout 2011.
He also sees growth coming for its FiOS Internet and TV
(189,000 FiOS Internet and 184,000 FiOS TV net additions in Q2), as well as
cloud and other strategic services.