Earnings Up Almost 10% At Verizon In Quarter

Verizon Communications said on Monday that sales of more expensive wireless contracts helped drive earnings up nearly 10 percent during the first quarter, offsetting declines in traditional phone service.

The carrier said it also benefited from strong demand for wireless data plans and sales of its new fiber optic television service.

“Results for the first quarter were strong and demonstrate that we weathered the economic uncertainty,” Doreen A. Toben, Verizon’s chief financial officer, said in a conference call with analysts on Monday.

But while the wireless business showed growth over all, the company signed on fewer new customers during the first quarter than it did during the period last year. Verizon signed up 1.5 million new wireless customers during the first quarter, beating AT&T’s 1.3 million during the period, but fewer than the 1.7 million new subscribers Verizon added a year ago.

Based in New York, Verizon ended the quarter with 67.2 million wireless subscribers, behind AT&T with 71.4 million. Verizon’s churn rate — the proportion of customers who cancel their service — was 1.2 percent, the industry’s lowest rate, while AT&T’s churn rate was 1.7 percent.

Verizon lost another 8.2 percent of its landlines during the quarter, a trend the company is trying to counter with the addition of new services like its digital television service, FiOS TV. The company added 263,000 customers to FiOS TV during the quarter, for a total of 1.2 million.

On Wall Street, the results were greeted with relief that Verizon, like AT&T last week, appeared largely unscathed by economic woes. Shares of Verizon rose 91 cents on Monday, to close at $37.95.

“Over all, they were mostly in line with what we expected,” said John Hodulik, an analyst with UBS. “Some of the growth engines were strong, but other core areas, like business, were off. The company is increasingly dependent on wireless data for growth.”

During the first quarter, Verizon began offering a $99.99 monthly cellular plan with unlimited calling and no roaming charges. The company said the percentage of customers opting for plans costing $99 or more rose from 4 percent before the new plan was introduced to 15 percent in the first quarter.

Dennis F. Strigl, Verizon’s president and chief operating officer, said a high percentage of customers who chose an unlimited plan also chose a premium data package, further bolstering revenue. “At this point, we’re very happy with the way this plan is moving in the market for us,” Mr. Strigl said.

Verizon’s revenue rose 5.5 percent, to $23.8 billion, from $22.6 billion a year ago. Net income for the quarter rose to $1.6 billion, or 57 cents a share, from $1.5 billion, or 51 cents a share, in the first quarter of 2007.

Excluding items, Verizon said net income would have increased to $1.7 billion, or 61 cents a share, from $1.6 billion, or 54 cents, in the year-ago quarter, in line with analysts’ forecasts.

Verizon Wireless reported $11.7 billion in wireless revenue during the quarter. AT&T reported $11.8 billion in mobile revenue.

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