NEW YORK – Verizon Communications reported year-over-year double-digit percentage growth in operating income and earnings per share for the third consecutive quarter. Third-quarter 2013 results showed continued high customer demand for Verizon Wireless, FiOS and strategic enterprise services. Verizon’s Wireline segment reported continued strong growth in consumer revenues, driven by continued strong customer demand for FiOS services. The company is on track to achieve net new customer growth targets for FiOS in 2013.
Wireline Highlights
- FiOS revenues grew 13.4 percent, to $2.8 billion in third-quarter 2013, compared with $2.5 billion in third-quarter 2012.
- Wireline operating income margin was 1.6 percent in third-quarter 2013, up 120 basis points over third-quarter 2012. Segment EBITDA margin (non-GAAP) was 22.7 percent, compared with 21.7 percent in third-quarter 2012. Verizon continues to expect that full-year 2013 Wireline EBITDA margin will be similar to 2012 when excluding impacts of Superstorm Sandy from last year’s results. The company also continues to target improved Wireline profitability and margin expansion in 2014.
- In third-quarter 2013, Verizon added 173,000 net new FiOS Internet connections, up 27.2 percent from third-quarter 2012 – and 135,000 net new FiOS Video connections, up 13.4 percent. Verizon had a total of 5.9 million FiOS Internet and 5.2 million FiOS Video connections at the end of the quarter, representing year-over-year increases of 12.6 percent for each.
- FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase. FiOS Internet penetration was 39.2 percent at the end of third-quarter 2013, compared with 37.0 percent at the end of third-quarter 2012. In the same periods, FiOS Video penetration was 34.9 percent, compared with 32.9 percent. The FiOS network passed 18.3 million premises by the end of third-quarter 2013.
- Verizon is enriching the FiOS Video customer value proposition by adding free anytime, anywhere mobile access to nine of the most popular TV channels via the FiOS Mobile app (iPad, iPhone, select Android tablets and smartphones, and Kindle Fire HD). Customers who download the app can also buy or rent more than 45,000 on-demand movie and TV show titles from Verizon FlexView. More live TV channels will be added in the coming months.
- By the end of third-quarter 2013, more than 40 percent of FiOS Internet customers subscribed to FiOS Quantum, which provides speeds ranging from 50 to 500 Mbps, up from 35 percent at the end of second-quarter 2013.
- Broadband connections totaled nearly 9 million at the end of third-quarter 2013, a 2.6 percent year-over-year increase. Overall, net broadband customers increased 56,000 in the third quarter, as FiOS Internet net customer additions more than offset a decline in subscribers for DSL-based high speed Internet services.
- Verizon has been replacing high-maintenance portions of its residential copper network with fiber optics to provide enhanced services and to reduce ongoing repair costs. Through the first nine months of 2013, Verizon migrated nearly 250,000 homes to fiber, on track to exceed a target of 300,000 migrations within FiOS markets in 2013. By year-end 2013, Verizon projects it will have less than 1 million remaining customers served by copper in FiOS markets.
