Verizon Communications drops following quarterly results

21st Apr 2015 17:11

Profits at US telecommunications giant Verizon Communications dropped sharply at the start of 2015, although growth in customers numbers remained strong thanks to promotions.First quarter net income declined 27.5% to reach $4.4bn or $1.02 per share in adjusted terms.Analysts had been anticipating earnings per share of 95 cents.Revenues in the first three months of the year increased by 3.8% to reach $31.9bn (consensus: $32.3bn), as the number of net retail postpaid connections grew by 565,000. However, the main driver of those new clients was a promotion including free tablets.However, in parallel the company lost 138,000 phone users.Operating margins on an EBITDA basis improved to 37.4% from 36.7% in the previous quarter.During the reporting period Verizon sold its local wireline operations serving customers in three states to Frontier Communications and monetized wireless tower assets in a transaction with American Tower.Including a non-recurring $2.4bn related to the monetization of tower assets, cash flow from operating activities increased to $10.2bn in the first three months of 2015, compared with $7.1bn in first-quarter 2014.Proceeds from those disposals will help Verizon pay for the $10.4bn acquisition of airwaves at an auction in January.Excluding the tower-transaction impact, quarterly free cash flow reached approximately $4.2bn, compared to $3.0bn one year ago.As of 18:05 shares in the company were 0.48% lower at $49.15.