Verizon Reports Double-Digit Earnings Growth

Verizon Communications Inc. (NYSE:VZ) today reported continued strong results in the second quarter 2008.

Verizon Wireline expanded penetration of FiOS services and continued to increase sales of enterprise strategic services. In the second quarter (with prior-period comparisons adjusted to reflect the impact of the previously mentioned spinoff):

• Sales penetration rates (percentage of potential customers who buy the service) increased for both FiOS Internet (available for sale to nearly 8.4 million premises) and FiOS TV (available for sale to 7.0 million premises). FiOS Internet penetration averaged 23.5 percent across all markets, up from 18.7 percent in last year’s second quarter. FiOS TV penetration averaged 19.7 percent across all markets, up from 13.3 percent.
• Verizon added 176,000 net new FiOS TV customers, for a total of nearly 1.4 million FiOS TV customers as of the end of the quarter.
• Verizon added 187,000 net new FiOS Internet customers. The company had nearly 2 million FiOS Internet customers at the end of the quarter, nearly doubling the number of FiOS Internet customers since the end of second quarter 2007. Verizon added its 2 millionth FiOS Internet customer earlier this month.
• Broadband and video revenues from consumer customers totaled more than $1.0 billion in the second quarter, representing year-over-year growth of 52.9 percent.
• Growing revenue from broadband and video services drove consumer ARPU in legacy Verizon wireline markets (which excludes consumer markets served by the former MCI) to $63.76, a 10.4 percent increase compared with last year’s second quarter. The ARPU among FiOS customers was more than $130 per month.
• Verizon Business had total revenues of $5.3 billion, or growth of 0.9 percent compared with last year’s second quarter. This was Verizon Business’ seventh consecutive quarter of year-over-year pro-forma revenue growth (non-GAAP, calculated as if Verizon and MCI had merged on Jan. 1, 2005). Global enterprise revenue, representing retail sales, increased 1.7 percent to $4.0 billion, compared with last year’s second quarter.
• Sales of strategic services — such as IP (Internet protocol), managed services, Ethernet and optical ring services — continued to drive growth at Verizon Business. These services generated $1.5 billion in revenue, up 18.7 percent from second quarter 2007.

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