Verizon's Q2 wireline losses offset by broadband, business service gains

Verizon's (NYSE: VZ) Q2 wireline revenue, while down 3.3 percent, was offset by an increase in new Fiber to the Premises (FTTP)-based FiOS subscribers and the continual build out of its global network infrastructure.     

Verizon Communications reported a net loss of $198 million, compared to a net profit of $1.48 billion in the year-ago quarter after being forced to book $2.3 billion in charges stemming from its ongoing buyout of around 11,000 employees.

Still, Ivan Seidenberg, Chairman and CEO of Verizon said it saw "solid improvement in operational results in the quarter, and that its spinoff of its rural lines in 14 states to Frontier "improves our future growth profile." The service provider said that it will focus its attention on wireless, FiOS and global IP services.

Here's a breakdown of the other key metrics:

Wireline Revenue: Verizon reported wireline revenues of $11.1 billion, down 3.3 percent compared to Q2 2009, while total access lines fell 9.2 percent to 35 million. The service provider also saw declines in its wireline workforce. As of the end of Q2 2010, Verizon's wireline workforce totaled 110,600--a decline of 3,800 compared with the end of the first quarter 2010. In addition, more than 9,200 employees were transferred to Frontier as part of the completion of its sale of its wireline assets to the rural ILEC. 

ARPU: Wireline consumer ARPU grew 11.4 percent to $80.76 in Q2 over Q2 2009. Even though Verizon said it will focus its attention on established markets, ARPU for FiOS FTTP customers was more than $145.

Broadband Growth:
Verizon's total broadband and video revenues increased 20.1 percent over Q2 09 to $1.8 billion. During the quarter, Verizon added 196,000 net FiOS Internet and 174,000 FiOS TV customers. As of the end of Q2, Verizon FiOS was available to 12.9 million premises.

Business Services:
Fueled by a number of large customer wins with multinational companies and high profile government agencies, including the U.S. Department of Health and Human Services, Verizon's global enterprise revenue totaled $4.0 billion in Q2. This was a 0.6 percent increase over Q2 2009 and an improvement from the 1.4 percent year-over-year decline in the first quarter of 2010. To meet growing global business demands, Verizon not only built a second data center in Hong Kong, but it also installed 18 additional Private IP edge routers and added new converged packet architecture switches in four key international sites.

Capital Expenses: Capital expenses came in at $4.2 billion in Q2 2010, down 3.6 percent from Q2 2009. Verizon continues to build out its global network infrastructure serve multinational corporations as well as investing in its existing FiOS FTTP markets.

For more:
- see the earnings release here
- Reuters has this article

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