Verizon adds 194,000 FiOS subs in Q4; misses earnings estimates

Verizon (NYSE: VZ) added 194,000 FiOS video subscribers in the fourth quarter, en route to a record $28.4 billion in revenue for the quarter, an increase of 7.7 percent from a year ago, and just eclipsing analyst's estimates of $28.39 billion. The company reported quarterly earnings of 52 cents per share, just missing Wall Street's expected 53 cents.

The company said FiOS services to consumer retail customers represented 61 percent of consumer wireline revenues in the quarter.

Revenues were $110.9 billion for the full year, a 4 percent increase compared with 2010. Consolidated EBITDA was $29.4 billion in 2011. On an adjusted basis (non-GAAP), EBITDA increased by more than $950 million in 2011 compared with 2010.

The increase in subscribers puts Verizon's FiOS service at 4.2 million. The company also reported it had added 201,000 FiOS Internet subs, bringing its total to 4.8 million users.

CEO Lowell McAdam said the company "finished 2011 very strong, both in terms of revenue growth and by delivering an 18.2 percent total return to our shareholders for the full year,' and said Verizon was well-positioned for 2012, forecasting wireline margin expansion in 2012.

"With recent strategic moves and our investments in FiOS, LTE, and global IP and cloud-based strategic services, Verizon has set the stage for accelerated growth across our business units, and we look to continue to build significant value for shareholders in 2012," he said.

Verizon reported a loss of 71 cents in EPS in fourth-quarter 2011, compared with earnings of 93 cents per share in fourth-quarter 2010, due primarily to the impact of previously announced non-cash pension items. On an annual basis, Verizon reported 85 cents in 2011 EPS, compared with 90 cents per share in 2010. Adjusted annual EPS (non-GAAP) was $2.15 in 2011, up from $2.08 on a comparable basis (non-GAAP, excluding results from divested businesses) in 2010.

Verizon said its fourth-quarter 2011 operating revenues were $10.1 billion, a decline of 1.5 percent compared with fourth-quarter 2010, but saw a 1.3 percent increase in consumer revenues; operating income grew 18.6 percent to $300 million.

Verizon said its wireline consumer ARPU increased 8.5 percent from a year ago to $96.43, with ARPU for FiOS customers hitting more than $148, up about $2 from a year ago. FiOS services to consumer retail customers represented 61 percent of consumer wireline revenues in fourth-quarter 2011.

Global enterprise revenues also rose; they were up 1.3 percent to $3.9 billion from a year ago. Sales of strategic services--including Terremark cloud services, security and IT solutions and strategic networking--increased 14.7 percent compared with fourth-quarter 2010 and represented 51 percent of global enterprise revenues in fourth-quarter 2011.

Verizon said FiOS penetration continued to increase, with Internet penetration at 35.5 percent at year-end 2011, compared with 31.9 percent at year-end 2010. In the same periods, FiOS Video penetration was 31.5 percent, compared with 28.0 percent, respectively. The FiOS network passed 16.5 million premises at year-end 2011, up more than 900,000 from year-end 2010.

It also reported 8.7 million broadband connections.

For more:
- see this release

Special Report: IPTV in the fourth quarter of 2011

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