After suffering a loss worse than expected during the fourth quarter as a result of the aftermath of Hurricane Sandy, Verizon bounced back with stronger than expected first quarter earnings.
The largest U.S. cellular network by subscribers reported a first quarter net profit on revenue of $29.4 billion, or 68 cents a share, up by 15 percent on the same quarter a year ago.
However, Verizon was expected to report first quarter earnings of 66 cents a share on revenue of $29.55 billion.
The cellular giant sold 4 million iPhones during the first quarter. More than half were iPhone 5 handsets.
A total of 7.2 million smartphones were activated during Q1, with around 28 percent being new activations. Out of this, 5.9 million of these running on Verizon's next-generation 4G LTE network.
Verizon added 677,000 retail postpaid net connections, up 35 percent year over year, and now has a total 98.9 million customers, including in its prepaid division, up 6.4 percent year over year.
By the numbers:
- 7.2 million smartphones activated during the quarter
- 5.9 million of all activations now run on Verizon's 4G LTE network
- 54 percent of all data traffic on Verizon's 4G LTE network
- Verizon's 4G LTE service is available to 287 million people in 491 markets across the U.S.
- 34.9 million retail postpaid accounts; 43,000 retail prepaid net additions during the quarter
- Smartphone penetration at 61 percent, up from 47 percent a year ago
- 188,000 fiber broadband (FiOS) Internet and 169,000 FiOS video net additions
In enterprise and wholesale, Verizon's wireline business increased sales of global enterprise strategic services. The company said this "continued to help mitigate lower revenues resulting from secular and global economic impacts."
Consumer revenues were $3.6 billion, an increase of 4.3 percent year over year. Broadband connections totaled 8.9 million at the end of the first quarter, a 1.4 percent year-over-year increase.
Verizon also noted that it ended the quarter with a $1.6 billion rise in cash flow, a 26 percent increase on the same quarter a year ago.
Verizon chief executive and chairman Lowell McAdam said in prepared remarks that the cellular giant was off to "an excellent start in 2013."
Our strategic investments in wireless, wireline and global networks have given us the platforms to sustain momentum and take advantage of growth opportunities in key markets for broadband, video and cloud services. With ongoing improvements in operating efficiency, we expect continued growth in free cash flow and earnings as we move through the year.
Verizon shares have jumped by around 17 percent year-to-date, and rocketed by 35 percent from the same quarter a year ago.