Verizon Boasts Strong Earnings, Hints at Windows as 'Third Ecosystem'
With strong sales in its wireless and FiOS business, Verizon Communications on Thursday boasted a 15.7 percent growth in earnings per share for the first quarter, with a $922 million increase in cash flow from the same quarter of 2011.
Revenue from Verizon Wireless, which the company owns jointly with Vodafone Group Plc of the United Kingdom, rose 7.7 percent, with income from data plans up 21.1 percent and 734,000 retail net additions, including 501,000 postpaid billing customers. The carrier now has 93 million retail customers, maintaining its dominance of the U.S. market.
Landlines Dropping Fast
Subscriptions to FiOS fiber optic services grew by 193,000 Internet customers and 180,000 TV customers, while 104,000 more customers signed up for non-FiOS broadband connections. More than 5 million people now access the Internet via FiOS, the company said. Voice connections for homes and business, however, fell 6.9 percent year over year and 20.1 percent quarter-to-quarter as more people give up their landlines for mobile phones.
"We built momentum coming out of 2011, and our results show that we continue to execute in the key growth areas of our business," said Lowell McAdam, Verizon Communications' chairman and CEO. "Verizon Wireless produced both great growth and great margins, and we produced another strong quarter of FiOS growth. We are confident we will improve Wireline margins for the full year."
Verizon Wireless is investing substantially in its high-speed, long-term evolution data network, which as of today is available in 230 markets across the country, and it has benefited from its wide range of phones powered by Google's Android, the leading operating system in the market, as well as Apple's iPhone.
In a conference call with reporters Thursday, Verizon Communications CFO Fran Shammo said that more than half of the 6.2 million smartphones sold by Verizon Wireless in the first quarter were iPhones, or 3.2 million units.
But he suggested the carrier was ready to join AT&T in embracing Microsoft's Windows Phone 7 devices. Currently Verizon carries only the HTC Trophy, and has not yet added a Windows device made by Nokia, even as AT&T promotes its brand new Lumia 900 to the hilt.
"We created the Android platform from the beginning and it is an incredible platform today that we helped to create, and we are looking to do the same thing with a third ecosystem," Shammo said, according to The Wall Street Journal.
The "third ecosystem" reference seems to dismiss Research In Motion's BlackBerry devices, which are well-represented on Verizon shelves but have been struggling in the market.
J.D. Power and Associates analyst Kirk D. Parsons told us Verizon is surely keeping a close eye on AT&T's Lumia sales.
"The company has offered Windows-based devices in the past but sales are not on the scale of the other OEM brands," Parsons said. "So I guess it will be a wait-and-see approach to learn from AT&T's launch success, or not."
Parsons noted that Verizon initially embraced Android as a "proxy platform" to compete with AT&T's exclusive offering of the iPhone.