Verizon takes loss in 2Q; FiOS TV sees modest growth

Verizon Communications said its FiOS TV service base increased 27 percent over a year ago, with the addition of 174,000 new subs in the second quarter, but the company nevertheless reported a loss, primarily because of the $2.3 billion hit it took on the continuing buyout of 11,000 workers.

Verizon said it also added 196,000 FiOS Internet subscribers, bringing its total customer base to 3.2 million FiOS TV subs and 3.8 million FiOS Internet customers. Verizon has posted consecutive quarterly gains in the number of customers using FiOS services since FiOS Internet was introduced in 2004. Verizon said that by the end of the quarter, the FiOS network passed 15.9 million premises.

AT&T yesterday reported its U-verse television product added 209,000 subscribers [1], taking it to 2.5 million subscribers, an increase of almost 60 percent over the past year, and said revenues from U-verse services for the first time ever topped $1 billion for the quarter. It's overall profit for the quarter was $4.02 billion.

New York-based Verizon, meanwhile, said it lost $198 million, 7 cents a share, compared to a profit of $1.48 billion, or 56 cents a share, in the like quarter a year ago. Revenues fell short of analysts' expectations, dipping 0.3 percent to $26.7 billion.

Verizon's somewhat modest FiOS customer gains still produced $80.76 ARPU for the quarter, an 11.4 percent increase. ARPU for FiOS customers topped $145.

All FiOS-based services, including narrowband voice, generated 43 percent of consumer wireline revenues in the quarter, compared with 33 percent in second-quarter 2009, with total broadband and video revenues of $1.8 billion, up 20.1 percent from 2Q 2009.

FiOS TV penetration was 25.9 percent by the end of the quarter, with the product available for sale to 12.4 million premises. This compares with 24.6 percent and 10.3 million, respectively, at the end of second-quarter 2009.

FiOS Internet penetration was 29.7 percent by the end of the quarter, with the product available for sale to 12.9 million premises, compared to 28.1 percent and 11 million, respectively, at the end of 2Q09.

"Verizon showed solid improvement in operational results in the quarter," said Chairman and CEO Ivan Seidenberg. "In addition, the wireline spinoff to Frontier on July 1 improves our future growth profile. We see the opportunity to create additional shareholder value with a revenue portfolio that is now more heavily focused on wireless, FiOS and global IP."

For more:
- see this release [2]