Verizon Communications reported yesterday its quarterly revenue grew 3.4%, slightly faster than analysts estimated, as it added more subscribers than expected at its Verizon Wireless venture with Vodafone Group.
Verizon, which has agreed to buy Vodafone’s 45% share in their venture for $130bn, said the wireless business added 1.6mn subscribers in the quarter, compared with the 1.5mn average expectation of five analysts contacted by Reuters.
Verizon shares rose 0.8% in premarket trading after reporting that it earned $5.07bn, or $1.76 per share, in the fourth quarter, compared to a loss of $4.23bn, or $1.48 per share, in the year-ago period, including pension-related charges in both quarters.
Excluding unusual items, its earnings per share of 66¢ beat Wall Street expectations by a penny.
Verizon Wireless’s profit margin was 47% in the quarter based on earnings before interest, tax, depreciation and amortization, and beat the expectation of four analysts for a margin closer to 46%.
Revenue increased to $31.1bn from $30.05bn a year earlier. Wall Street expected $31.02bn, according to Thomson Reuters I/B/E/S.
The company said wireless customer defections, known in the industry as churn, increased slightly from the year-ago quarter but fell from the third quarter.
On the wireline side, it said it added 92,000 FiOS video customers and 126,000 net new FiOS Internet connections in the quarter.
Earlier yesterday, Verizon said it had agreed to buy Internet television assets from chip maker Intel Corp but did not disclose the terms of the deal.
Intel’s TV project, called OnCue, had faced challenges getting off the ground since it was officially unveil in February last year. The chipmaker’s new CEO, Brian Krzanich, ultimately decided Intel could not afford the distraction and expense, sources familiar with the decision told Reuters in late 2013.


Delta Air
US carrier Delta Air Lines reported a higher-than-expected fourth-quarter profit yesterday, aided by lower fuel costs and higher fares.
Delta, now the third-largest US airline behind the newly merged American Airlines Group and United Continental Holdings, said it expected margins to widen in the current period. It forecast an operating margin of 6% to 8% for the first quarter. Helane Becker, a Cowen & Co airline analyst, estimated a 5.4% operating margin for Delta for the first quarter.
Passenger revenue gains were strongest in the US and Latin America, helped by holiday travel.
Fourth-quarter net income totaled $8.5bn, or $9.89 a share, including a noncash gain of $8bn from a tax benefit. A year earlier it had a profit of $7mn, or 1¢ a share.
Excluding items such as the tax benefit, profit was $558mn, or 65¢ a share in the latest period, compared with the average analyst estimate of 63¢, according to Thomson Reuters I/B/E/S.
Quarterly revenue rose 6% to $9.08bn, while analysts targeted $9.04bn. Yield, a measure of the average airfare paid per mile flown, rose 4% to 17.05¢.
Operating expenses were up 2%, while costs for aircraft fuel and related taxes fell 7%.
In the fourth quarter, passenger revenue rose 9% in the US, 18.5% in Latin America and 1.9% in Europe but fell 1.6% in the Pacific region.
Atlanta-based Delta acquired Northwest in 2008 and bolstered revenue by charging more for seats with greater leg room, replacing 50-seat jets with larger planes that carry more passengers and buying a refinery to reduce fuel costs.
It reduced debt and formed partnerships with non-US airlines such as Britain’s Virgin Atlantic Airways and Brazil’s Gol to expand in higher-growth markets.
The moves enabled Delta to pay its first dividend in a decade last year and start a $500mn share buyback program to boost shareholder returns. Delta rejoined the Standard & Poor’s 500 Index last fall.