Verizon (NYSE:VZ, news, filings) kicked off the US telecommunications earning season with a solid third quarter. Revenues of $29.0B and adjusted EPS of $0.64 were each right on target, with profit margins at Verizon Wireless powering the way forward.
Verizon Wireless added 1.8M net retail wireless customers, which was above expectations, finishing the quarter at 95.9M. Meanwhile, the extra data consumed by smartphones helped grow the average monthly contract account over $145, up 6% over last year.
Wireline results were more muted, with FIOS and sales of strategic services to enterprises only partially offsetting the usual declines in voice and other legacy revenues. With FIOS growth the primary strong point in wireline, one wonders why Verizon doesn't revisit that business model and consider finding creative ways to improve its cost structure and restart the expansion.
Meanwhile, Verizon says it is transfering pension assets to Prudential via a single premium group-annuity contract to settle $7.5B of its obligations for 41,000 of its pension plan participants. As part of that, they are contributing some $2.5B to the plan, but then do not expect to have any cash requirements for pensions in 2013.
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