Verizon Communications Inc.'s profit edged higher in the third quarter as record growth in wireless and broadband subscribers offset the ongoing declines in traditional phone lines at the big telecommunications company that is buying MCI Inc.
Verizon said Thursday it earned $1.87 billion, or 67 cents per share, in the July-September period, up from $1.80 billion, or 64 cents a share, a year ago.
The latest results included a net gain of $37 million from the sale of a New York City office building as well as tax benefits of $115 million that included a repatriation of foreign earnings. Those gains were roughly offset by a $125 million expense relating to Verizon's investment in aircraft leases impacted by recent airline bankruptcies.
Verizon's revenue totaled $19.04 billion, up 4.6 percent from the year-ago tally of $18.21 billion.
The third-quarter profit was on target with most Wall Street forecasts, while revenues came in a shade higher than expected by the analysts surveyed by Thomson Financial.
Verizon's share price, which earlier this month sank to a multiyear low, rose 17 cents to close at $30.76 Thursday on the New York Stock Exchange. The stock is down nearly 24 percent after opening 2005 at $40.51.
"We feel bad that the stock has drifted down recently to two- and three- year lows," Verizon Chief Executive Ivan Seidenberg said in a conference call with analysts after the report. "We're committed to get the stock back to levels we think are commensurate with the underlying assets."
Seidenberg also expressed confidence federal and state regulators would clear the deal with no major antitrust conditions, and then be completed by early January.
Later on Thursday, the Justice Department issued its approval for the MCI acquisition as well as SBC Communications Inc.'s purchase of AT&T Corp., ordering the companies to sell certain assets to preserve competition in some markets. The agency said that without those conditions, the two deals would have resulted in higher prices for certain customers in eight Verizon markets and 11 SBC markets.
The deals are also subject to approval by the Federal Communications Commission, which is widely expected to sign off at its monthly public meeting on Friday.
Verizon Wireless, owned in partnership with Vodafone Group PLC, accounted for $8.4 billion of Verizon's revenue total, up 14.2 percent from the third quarter of 2004. The cellular customer base grew by 1.9 million subscribers, ending the quarter at 49.3 million.
Those gains narrowed the subscriber gap between Verizon Wireless and Cingular Wireless, the nation's biggest cell company with 51.4 million customers. A year ago, when Cingular completed its acquisition of AT&T Wireless, the lead over Verizon Wireless was greater than 5 million.
The pace of wireless customer losses slimmed in the third quarter to 1.3 percent of the subscriber base per month, down from a churn rate of 1.5 percent in the same period a year ago. However, average revenue per subscriber shrank 2.8 percent to $50.13 a month.
Users of wireless Internet and data services, seen as a key area for boosting revenues per subscriber, totaled 21.6 million at the end of September, up 48 percent from the year-ago level.
Subscribers for high-speed Internet service, primarily DSL connections as well as customers for the FioS service over Verizon's new fiber-optic lines in 15 states, grew by 389,000 to 4.5 million.
Also Thursday, Verizon fine-tuned its full-year projections, saying revenues would total roughly $75.3 billion, up between 5.5 percent to 5.8 percent from 2004. The company had previously said revenues would grow between 5 percent and 6 percent.
For the first nine months of 2005, Verizon earned $5.74 billion, or $2.05 per share, on revenue of $55.79 billion. In the year-ago period, nine-month earnings totaled $4.79 billion, or $1.71 per share, on revenue of $53.02 billion.