Mixed bag for Verizon's Q1

The largest US cellular giant added more than half-a-million net retail postpaid subscriptions during the quarter.

(Image: CNET/CBS Interactive)

Verizon's fiscal first quarter earnings reported Tuesday were a mixed bag.

The phone giant reported a fiscal first-quarter income of $4.22 billion, or $1.02 per share. Revenue landed at $32 billion, a 4 percent increase on the year-ago quarter (statement). Non-GAAP earnings were 84 cents per share.

Wall Street was expecting 95 cents per share on revenue on $32.28 billion. Verizon scored a hit on earnings, but a miss on revenue.

Verizon's chief executive Lowell McAdam said in prepared remarks that the company's year was off to a "strong start."

He added: "We expanded our base of customers seeking a premium experience, and we grew revenues, earnings and cash flow during a quarter in which we also took significant steps to sharpen our strategic focus."

(Images: Verizon)

Verizon, the largest wireless carrier in the US, said it had 565,000 net retail postpaid connections added during the three-month period, ending mid-March. That's a total of 102.6 million total retail postpaid connections.

The wireless division added 621,000 next-generation 4G smartphones, which along with 820,000 4G tablets. The company said 4G now accounts for 70 percent of its retail postpaid connections base, up from 49 percent a year prior.

Its churn rate was 1.03 percent for the first quarter, an improvement on last year's figures.

On its fiber cable service, FiOS, the company saw a 10.2 percent year-over-year increase in revenues, thanks to a bump in both Internet and video net additions.

On a conference call with analysts, CFO Fran Shammo said:

  • "New revenue streams from the Internet of Things and Telematics continue to emerge and grow. In the first quarter, these revenues totaled approximately $150 million, an increase of 25 percent. We continue to build upon our Internet of Things and video platforms. In particular, innovation within the transportation industry presents a great opportunity for us.

  • Verizon plans to decommission 10 central offices as it converts customers from copper to fiber.

  • Enterprise revenue fell 6 percent, but much of that was due to the strong dollar.

  • Verizon is consolidating its information technology network and moving more toward a software-designed approach.

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