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Verizon Reports Q2 Earnings: Sells 1.2 Million 4G LTE Devices, Announces a New CEO

Our pals from Verizon reported their Q2 earnings this morning and also announced that CEO Ivan Seidenberg would be stepping down and will remain solely on as chairman of the board – COO Lowell McAdam will take over as CEO.  All of this probably has little impact on all of us, but we can certainly hope that Lowell really hates and has a strong passion for unlocking bootloaders or something.  Silly…executives caring about their customers needs and wants.  Kidding!

They also announced that 1.2 million 4G LTE devices were activated during Q2, most of which were phones.  2.3 million i*hones were activated, which is around a 44% drop off from Q1.

Full press released after the break.  

Verizon Reports Accelerated Revenue Growth, Expanded Margins and Strong 2Q Earnings Performance



  • ·        57 cents in diluted earnings per share (EPS), compared with a loss of 42 cents per share and adjusted EPS (non-GAAP) of 51 cents in 2Q 2010.


  • ·        6.6 percent year-over-year increase in service revenues in 2Q 2011; data revenues up 22.2 percent; 27.1 percent operating income margin and 45.4 percent Segment EBITDA margin on service revenues (non-GAAP).
  • ·        2.2 million net additions, excluding acquisitions and adjustments, includes 1.3 million retail postpaid net customer additions; 106.3 million total connections, includes 89.7 million retail customers.
  • ·        Retail postpaid churn of 0.89 percent, the lowest in three years.


  • ·        189,000 FiOS Internet and 184,000 FiOS TV net additions.
  • ·        9.4 percent year-over-year increase in consumer ARPU; FiOS consumer retail revenues represent approximately 57 percent of total consumer revenues.
  • ·        17.8 percent increase in strategic services revenues, representing approximately 48 percent of total global enterprise revenues.

NEW YORK — Verizon Communications Inc. (NYSE, NASDAQ: VZ) today reported accelerated revenue growth and improved margins across its business groups, leading to a strong earnings performance in second-quarter 2011.

Verizon reported 57 cents in EPS in the quarter, compared with a second-quarter 2010 loss of 42 cents per share.

There are no adjustments to second-quarter 2011 earnings results.  Adjusted second-quarter 2010 earnings were 51 cents per share, excluding the impact of divestitures and non-operational charges (non-GAAP).  The most significant 2010 charges related to a workforce-reduction incentive offer that led to approximately 11,900 voluntary separations last year.

Strong, Positive Momentum

“In terms of earnings growth and the acceleration of revenue growth, this has been one of Verizon’s best quarters since the 2008 economic downturn,” said Chairman and CEO Ivan Seidenberg.  “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 added: “We expect Verizon Wireless to gain share in the retail postpaid market and widen its network-quality lead throughout 2011.  We also continue to see strong customer demand for FiOS Internet and TV, and for cloud and other strategic services.  At the same time, we remain focused on our cost structure, as we deliver improvements in wireline margins quarter after quarter.

Consolidated Revenue Growth Continues to Accelerate

On a consolidated basis, Verizon’s total operating revenues were $27.5 billion in second-quarter 2011, an increase of 2.8 percent compared with second-quarter 2010.  Last year’s results included revenues from operations that have since been divested.

On a comparable basis (non-GAAP), second-quarter 2011 total operating revenues increased 6.3 percent compared with second-quarter 2010.  This was Verizon’s strongest quarter for consolidated revenue growth in 10 quarters.

Also on a comparable basis, consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for second-quarter 2011 totaled $9.0 billion, up 5.2 percent year over year.

Cash flow from operating activities totaled $12.8 billion in the first half of 2011, down from $16.8 billion in the first half of 2010.  Last year’s total included cash flow from businesses that have since been divested and the timing of favorable tax-related impacts, and 2011 totals include inventory purchases for wireless devices and the impact of previously announced pension-fund payments in first-quarter 2011.  Verizon said its cash flow outlook for the remainder of 2011 remains very strong.

The company aggressively invested in growth opportunities in the first half of 2011.  One example is the deployment of Verizon’s nationwide 4G LTE (fourth-generation, Long-Term Evolution) wireless broadband network.  In first-half 2011, Verizon’s capital expenditures totaled $8.9 billion, compared with $7.6 billion in first-half 2010.

Verizon continues to expect full-year 2011 capital spending to be similar to its 2010 investment of $16.5 billion.

Verizon Wireless Delivers Another Strong Quarter

Verizon Wireless delivered strong growth in revenues, retail customers and other connections, driven by increased smartphone penetration and increased retail postpaid ARPU (average monthly service revenue per user).  In the second quarter of 2011:

Wireless Financial Highlights

  • ·        Service revenues in the quarter totaled $14.7 billion, up 6.6 percent year over year.  Data revenues were $5.8 billion, up $1.1 billion or 22.2 percent year over year, and represent 39.5 percent of all service revenues.  Total revenues were $17.3 billion, up 10.2 percent year over year.
  • ·        Retail postpaid ARPU grew 1.9 percent or $1.00 over second-quarter 2010, to $54.12. Retail postpaid data ARPU increased to $21.26, up 15.2 percent year over year.  Retail service ARPU also grew 1.9 percent, to $52.49.
  • ·        Wireless operating income margin was 27.1 percent.  Segment EBITDA margin on service revenues (non-GAAP) was 45.4 percent.

Wireless Operational Highlights

  • ·        Verizon Wireless added 2.2 million total connections, including 1.3 million retail postpaid customers, and 890,000 wholesale and other connections.  These additions exclude acquisitions and adjustments.
  • ·        At the end of the second quarter, the company had 106.3 million total connections, an increase of 6.6 percent year over year, including 89.7 million retail customers and 16.6 million wholesale and other connections.
  • ·        At the end of the second quarter, smartphones were 36 percent of Verizon Wireless’ retail postpaid customer phone base, up from 32 percent at the end of first-quarter 2011.
  • ·        Retail postpaid churn was 0.89 percent, the lowest in the industry and the company’s lowest since second-quarter 2008.  Total retail churn was 1.22 percent, an improvement of 9 basis points year over year and 11 basis points sequentially.
  • ·        Verizon Wireless continued to roll out its 4G LTE mobile broadband network during the quarter.  As of yesterday (July 21), Verizon Wireless 4G LTE service is available in 102 markets across the country, covering a population of more than 160 million.  By year-end, Verizon Wireless’ 4G LTE network, the fastest and most advanced LTE network in the U.S., is expected to be available in more than 175 markets across the country, covering a population of more than 185 million.
  • ·        The company introduced three new 4G LTE devices: the Droid Charge by Samsung, Revolution by LG and the MiFi 4510L 4G LTE Mobile Hotspot by Novatel Wireless.  The company also announced that the 4G LTE-enabled Samsung Galaxy Tab 10.1 is available for pre-order; the device is expected to launch by the end of this month.  During the second-quarter 2011, Verizon Wireless sold 1.2 million 4G LTE smartphones and Internet data devices.
  • ·        Verizon Wireless continued to invest in and enhance its 3G network, the nation’s largest and most reliable 3G network.
  • ·        During the quarter, Verizon Wireless deployed crisis response teams to help customers stay connected in areas devastated by disasters including the North Dakota floods,  Arizona wildfires and Joplin, Mo., tornado.

Improved Revenue Trends in Wireline

Verizon’s Wireline segment continued to expand margins, supported by improved revenue trends.  In the second quarter of 2011:

Wireline Financial Highlights

  • ·        Segment EBITDA margin (non-GAAP) was 23.8 percent, compared with 22.4 percent in second-quarter 2010.  This was Wireline’s fifth consecutive quarter of sequential EBITDA margin expansion.
  • ·        Second-quarter 2011 operating revenues were $10.2 billion, a decline of 0.3 percent compared with second-quarter 2010.  This is an improvement from a decline of 2.2 percent comparing first-quarter 2011 to first-quarter 2010.  Verizon acquired cloud and managed IT infrastructure leader Terremark Worldwide in April, and the inclusion of Terremark results added $98 million in revenue, representing 100 basis points of wireline revenue growth, in second-quarter 2011.
  • ·        Revenues for Verizon’s FiOS fiber-optic services to consumer retail customers generated approximately 57 percent of consumer wireline revenues in second-quarter 2011, compared with approximately 48 percent in second-quarter 2010.
  • ·        Consumer revenues grew 1.3 percent compared with second-quarter 2010.  Consumer ARPU for wireline services was $92.44 in second-quarter 2011, up 9.4 percent compared with second-quarter 2010.  ARPU for FiOS customers continues to be more than $146.
  • ·        Global enterprise revenues totaled $4.0 billion in the quarter, up 3.6 percent compared with second-quarter 2010.  Sales of strategic services — including Terremark cloud services, security and IT solutions, and strategic networking — increased 17.8 percent compared with second-quarter 2010 and now represent approximately 48 percent of global enterprise revenues.

Wireline Operational Highlights

  • ·        Verizon added 189,000 net new FiOS Internet connections and 184,000 net new FiOS TV connections in second-quarter 2011.  Verizon had a total of 4.5 million FiOS Internet and 3.8 million FiOS TV connections at the end of the quarter.
  • ·        FiOS penetration (subscribers as a percentage of potential subscribers) is now 30 percent or more for both services.  FiOS Internet penetration was 34 percent at the end of second- quarter 2011, compared with 30 percent at the end of second-quarter 2010.  In the same periods, FiOS TV penetration was 30 percent, compared with 26 percent, respectively.  The FiOS network passed 16.1 million premises at mid-year 2011.
  • ·        Broadband connections totaled 8.6 million at the end of second-quarter 2011, a 3.3 percent year-over-year increase.  FiOS Internet connections more than offset a decrease in DSL-based HSI connections, resulting in a net increase of 62,000 broadband connections from first-quarter 2011.  Total voice connections, which measures FiOS Digital Voice connections in addition to traditional switched access lines, declined 7.9 percent to 25.0 million — the smallest year-over-year decline since second-quarter 2007.
  • ·        During the quarter Verizon continued to execute its global cloud strategy, rolling out an expanded portfolio of secure IT solutions and an operational model for its Terremark subsidiary.  Verizon also continued to deploy integrated IT and communications solutions for multinational enterprise, medium-sized and government customers.  These solutions included expansion of the company’s managed mobility services for tablets, mobile access to cloud-based SAP applications and enhanced security management programs for health care providers.  Verizon also completed new agreements with a range of multinational corporations, including Constellation Energy, Epsilon, Masco Corp. and PHH Corp.
  • ·        Verizon expanded its global network infrastructure during the quarter as it continued to broaden its scope and capabilities.  The company installed 63 additional Private IP edge routers for a total of 915 edge routers in 245 sites throughout 63 countries, activated more than 1,500 kilometers (932 miles) of ultra-long-haul network across the southern part of the United Kingdom, and completed a joint fiber build in Singapore, which almost doubles the coverage of the Singapore fiber-optic network.  Verizon continued to demonstrate leadership in scaling the global IP network and kicked off the expansion of 100G IP backbone capabilities in the U.S. to nine routes.

NOTE: Reclassifications of prior period amounts have been made, where appropriate, to reflect comparable operating results for the divestiture of overlapping wireless properties in 105 operating markets in 24 states during the first half of 2010; the wireless deferred revenue adjustment that was disclosed in Verizon’s Form 10-Q for the period ended June 30, 2010; the spinoff to Frontier of local exchange and related landline assets in 14 states, effective on July 1, 2010; and other non-operational items.  See the accompanying schedules and www.verizon.com/investor for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.

Verizon Communications Inc. (NYSE, NASDAQ:VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to consumer, business, government and wholesale customers.  Verizon Wireless operates America’s most reliable wireless network, with more than 106 million total connections nationwide.  Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and delivers integrated business solutions to customers in more than 150 countries, including all of the Fortune 500.  A Dow 30 company, Verizon employs a diverse workforce of nearly 196,000 and last year generated consolidated revenues of $106.6 billion.  For more information, visitwww.verizon.com.

VERIZON’S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts, high-quality video and images, and other information are available at Verizon’s News Center on the World Wide Web at www.verizon.com/news.  To receive news releases by email, visit the News Center and register for customized automatic delivery of Verizon news releases.

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  • Anonymous

    So…..a year old, supposedly outdated, 3G iPhone 4 experienced a 44% drop in sales (most likely due to anticipation of iPhone 5) and still managed to sell TWICE AS MANY UNITS and all of the 4G, LTE, fake-iPhone Android wannabes COMBINED??? Ya don’t say???? Lol!!

  • Granted

    Wow, who ever could read all that dribble, must have as little a life as Kleenex does.

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  • RW-1

    Hmm, more $$$ made, but yet they feel the need to rape us for data, seems there is more than enough if they stop one years bonus to the executives and use it to correct the 4G netowrk deficiencies, then it could handle unlim data for all.

    In related news, we’re all wishing Motorola’s Q2 report would indicate the same fate for Jha …

  • So will you finally admit that the Thunderbolt did not outsell the iPhone 4 or are you kiddies still having a hard time wrapping your head around this fact?

    • Gee

      Really who cares most of us know the Thunderbolt was a turd, So in the great turd race the biggest turd of all won.. Whoopee im happy you have one feather in your hat. I guess that’s what the iphone is down to taking what it can get

    • Christephor

      how can the thunderbolt outsell the iphone 4 when people like you will buy the iphone cuz everyone else is buying it 

      • TheAndroid1

        So your answer is that people buy the iPhone because people buy the iPhone?

        I don’t see your point, the iPhone is bad because a lot of people like it.
        In reality Android is outselling the iPhone OS, does that mean Android sucks, because some people bought it because their friends had it?

        • Christephor

          im a huge android fan eversince i got the og droid a couple years ago and yes my point is alot people get an iphone because there friends have it and about the android outselling the iphone os duh how many android phones are there out there compaired to the iphone now if you look at the original post he said the thunderbolt(phone) did not outsell the iphone 4(phone) see how were talking about phones here not operating systems so before you put your foot in your mouth read the entire post troll

          • TheAndroid1

            i dont know if you didnt understand because i used punctuation and didnt spell a lots of words wrong but i was responding to the second half of your quote that the iphone will outsell other phones because a lot of people and their friends like it duh while the original comment was only talking about the thunderbolt the consept remains the same that the logic in your first post makes absolutly no sence at all because you are bashing both the iphone and android but if that was yor intention then you are the biggest troll i have ever seen

      • Michael

        Oh with that kind of mentality, I guess you bought Android cause everyone else did. Pathetic.

  • Stelv81

    They sold that many 4g device! All there 4g devices are crap! Their 3g devices are miles ahead. If you are buying a 4g device, you have to realize that yea you get really fast internet, but 3g is still fast. Why do you need those crazy speeds. Is the lack of battery life, buggy software, thick huge phone and or lag really worth it just for 4g speeds which are pretty unnecessary unless you are downloading massive torrents with your phone, etc.

  • I dont get the whole Locked Bootloaders stance. Unlocked bootloaders = more bricks because some people dont pay attention and mess up their software. Bricks = more people buying phones. Seems win to win to me.

    • It all has to do with insurance.  More bricked phones=more people lying and making Verizon/Asurion send them a replacement.  They are also trying to stop people from “illegally” tethering their phones without paying for the tether plan.

    • RW-1

      98% of reported “Bricked” phones … are not bricked, as those same DA’s that supposedly don’t pay attention also do not listen to those who have gone before.

      This is a dead arguement IMO, as most of those who decide to root come to sites like this in the first place to learn beforehand.

      Secondly, there is absolutely no method they are using at Asurion to determine if the returned phone has been rooted. I know, I used to deal with them, they show the phone as received to inventory and report that back to VZ so you don’t get billed for the phone.

      Third, those who return said bricked unti to a VZ store, well .. you got me there, if they are that dumb to open their mouths and say they flashed it and it failed to boot deserve what they get, because if it doesn’t boot for you, it won’t boot for the VZ kid working the store, and they will flash the stock sbf to get it back, magically it works again! and if not, then gee sir it does appear to be busted – replace or or asurion.

      Hank is correct as it is more to do with tethering and pre-loaded crap VZ paid vendors for to have them on the phone in the first place, your removing them defeats the purpose of them being there, to get you to sign up for something.

  • They make more money than they’ve ever made and yet they feel the need to raise prices and switch to tiered data?  F*ck off Verizon, I’m switching to whoever gets the next Nexus phone first (and I know it won’t be you!).

    • Cool, well have fun on MetroPCS, Cricket or Sprint.

  • Anonymous

    Looks like status quo to me. Not to much Change for a COO who’s been riding the wave to add CEO to his resume.

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  • TheJester

    Maybe he’ll hate locked bootloaders and capped data plans too. I wish

  • Good old Verizon made so much money and want even more with their evil tiered data caps. Yay for data overages!

  • Windarm

    I wish we could get some Apple fanboys in here so we could make fun of them

    • Anonymous

      THE iPhone 4 is 4g so its 2.3m + 1.2m 4g phones activated. The iPhone 4 is also faster than the thunderbolt or charge

      • Mii

        I find it hard to believe the I*hone 4 is better than anything besides maybe the i*hone 3

      • Anonymous

        Why am I the only person who has a problem with this fools comment?

        • Anonymous

          It is also more open once i jailbreak it. Everyone else copies the iPhone and cant do it as well. How many times has your thunderbolt been updated and not fixed anything?

        • TheAndroid1

          Look at his name and who he was responding to, he was being sarcastic.  Somebody asked for an Apple fanboy, so he pretended to be one.

          • Anonymous

            thank you for not being ignorant

      • Stelv81

        The IPhone 4 is faster than the Charge yes, but it’s processor is not faster than the snapdragon processors in the HTC Thunderbolt and HTC Droid Incredible 2. The iphone 4 also has lower ram which hinders it multitasking speed and a very tiny screen. My inc2 gets 2 days battery, but the iphone has the TB beat in that dept. My bro has the iphone 4…in real world speed and multitasking my Incredible 2 is twice as fast, and just as dependable. And yes I am a Mac person, I have 2 Mac computers

        • TheAndroid1

          Quick question, how did you compare multitasking speed?

      • Stelv81


        This link will clearly prove that the Iphone 4 is NOT 4g. It’s 3g. Why do u all think its a 4g phone

    • Why would you make fun of them? Because the 1 year old iPhone outsold all 4G devices combined?

      • Anonymous

        Here’s your fanboy [email protected]:disqus , time to make fun of him. 

        • Michael

          oh you again? man you make me not like Die Hard because of your stupidity. switch your avatar and name, and start being original you loser.

    • Anonymous

      Only in the twisted minds of fandroids will they try to make fun of someone that just outsold your fake iPhones by a 2 to 1 margin….

  • Anonymous

    I hope the new CEO likes the Nexus phones.

    • Anonymous

      The new CEO will like the iPhone, and i will be able to buy even more black turtle necks, once i release the already behind the curve “next gen” iPhone. It will be revolutionary, magic, and change everything

      • Christephor

        are you kidding me the iphone now has this revolutionary thing called notifications its gunna be awsome ive never seen a phone that has it…..wait….hold on…..awww crap…..every android phone has it…..this is some bs

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  • Q

    Amazing that they were able to sell that many POS Thunderbolts

    • I bought one to get grandfathered into unlimited data.

      • Q

        Same here.  I didnt need to though apparently.  Im still kicking myself for wasting my upgrade on this phone.  Apparently I could have kept by Droid X and upgraded to the Bionic and still keep Unlimited data… 

        • Anonymous

          If you’re that pissed just sell it, and pay full retail when the Bionic comes out. I mostly bought the Thunderbolt to get in on the unlimited LTE plan, but it’s proven a pretty solid upgrade from my Incredible. I upgraded on a 2 year contract, with the idea that I would sell it and upgrade off contract sometime in the next 6-12 months when a really nice phone presents itself. Crossing my fingers for a Nexus with LTE this winter.

      • Yep me too. That was before we knew we didn’t have to buy a 4G phone to get locked in to unlimited data.

  • Tazandsim

    Why do you call it i*hones?

    • Jeremy Gentry

      because its a curse word that must be bleeped out!

    • EC8CH

      I like to think it rids the world of fruity phone search results 😛

      • Stelv81

        Yes, it’s so it doesn’t come up in a search

    • Anonymous


    • Michael

      because people are that immature and insecure in here for not owning an iPhone.

  • Jim Dandy

    First order of business, let us get a worthy lte phone on the market :p

  • Chris_leighton

    First lololol im so awesome

    • GotSka81

      Nice try, you fail.

  • GotSka81

    Here’s hoping!