[Newsfactor] Verizon Communications has reported a 5.3 percent increase in its first-quarter profits, along with a nine percent gain in sales adjusted for the Alltel acquisition. Verizon also reported adding 1.3 million wireless customers, outpacing AT&T's 1.2 million. Verizon was reported in talks with Apple, Inc. about ending AT&T's exclusive rights to the iPhone.
In another positive earnings report for the wireless industry, Verizon Communications on Monday said its first-quarter profit rose 5.3 percent. Verizon's wireless sales were up 29.6 percent, including gains from the Alltel acquisition. Adjusted for the acquisition, Verizon's sales rose nine percent.
The leading U.S. mobile-phone carrier added a healthy 1.3 million wireless customers in the quarter, not counting the subscribers it added when it acquired Alltel. Verizon's subscriber wins in the first quarter outpaced AT&T's 1.2 million, which surprised analysts given AT&T's Apple iPhone advantage. Verizon ended the quarter with 86.6 million wireless subscribers.
In a possible further challenge to AT&T, USA Today reported Verizon and Apple were reported in talks about Apple's iPhone. AT&T is the exclusive U.S. carrier for the iPhone, but only through next year.
An Apple-Verizon deal would give Apple access to a larger market and might help stem Verizon subscriber losses to AT&T. However, the iPhone has been a significant revenue source for AT&T, and it likely would fight hard to retain exclusive rights to the iPhone.
"Our business groups executed with excellence in the first quarter," said Verizon Chairman and CEO Ivan Seidenberg. "Our operational and financial discipline produced continued revenue and earnings growth, as well as an expansion of our already strong operating cash flows. A highlight of the quarter was our successful completion of the Alltel acquisition. We quickly began integration efforts, and we are aggressively pursuing synergies."
Verizon Profit Rises as Subscriber Gain Outpaces AT&T