Verizon Communications Inc., the second-largest US phone company, beat analysts’ estimates for second-quarter profit as customers snapped up the iPhone and new devices that run on the carrier’s high-speed network.
Net income was $1.61 billion, or 57 cents a share, compared with a loss of $1.19 billion, or 42 cents, a year earlier, New York-based Verizon said on Friday in a statement. Analysts predicted 55 cents, the average of estimates compiled by Bloomberg. The company also named Lowell McAdam chief executive officer effective 1 August, replacing Ivan Seidenberg, who will remain chairman.
Verizon Wireless, co-owned with Vodafone Group Plc, is building a new network over three years to offer phones with faster Internet connections.
The 4G technology, along with sales of Apple Inc.’s iPhone, helped Verizon add 1.3 million contract subscribers, compared with the 948,000 estimate of six analysts compiled by Bloomberg.
Verizon still has enjoyed the perception of having a better network, said Jonathan Atkin, an analyst at RBC Capital Markets in San Francisco, in an interview. He expects the shares to outperform others in the industry in the next year. The playing field has been leveled, with both companies having a similar array of devices.
Verizon’s sales rose 2.8% to $27.5 billion, also beating estimates.
AT&T’s four-year US exclusivity deal for the iPhone ended in February when Verizon began selling the device. AT&T, which trails Verizon in mobile-phone subscribers, yesterday said it added 331,000 contract customers last quarter.
Verizon covered a population of 100 million potential users with its 4G network by the end of last year and will be substantially through building the network by the end of 2012, chief financial officer Fran Shammo said in May at an investor conference.
Verizon rose 24 cents to $37.57 in New York Stock Exchange composite trading on Thursday. The stock had added 5% this year before Friday.
Dallas-based AT&T is the largest US phone company.