Verizon Communications' second-quarter profit rose 19 percent, but the big telephone company's results were slightly shy of Wall Street...
Verizon Communications’ second-quarter profit rose 19 percent, but the big telephone company’s results were slightly shy of Wall Street forecasts and signs of price competition clouded an otherwise powerful showing by Verizon Wireless.
Verizon said yesterday it earned $2.11 billion, or 75 cents per share, in the three months ended June 30, including $336 million from the sale of the company’s telephone operations in Hawaii, as well as some tax benefits and expenses that roughly offset each other. Verizon earned $1.80 billion, or 64 cents per share, a year ago.
The earnings came in a penny a share below many analysts’ forecasts, but Verizon’s shares rose 11 cents to close at $34.13 after the report.
Second-quarter revenue totaled $18.57 billion, up 4.6 percent from $17.76 billion a year ago. Under accounting rules, those figures include 100 percent of the revenue generated by the cellular business, a joint venture with Vodafone Group in which Verizon owns a 55 percent stake.
Most Read Stories
- Look back at our live coverage of the solar eclipse WATCH
- Your guide to enjoying the eclipse from Seattle
- Friends honor artist’s last wishes with water ballet in a Seattle kiddie pool WATCH
- 3 surprising Seattle restaurant closures — plus 11 more
- Battling demons in a community looking to Trump for change VIEW
The revenue from Verizon Wireless rose 14.6 percent to $7.8 billion, as the nation’s second-largest mobile phone business increased its subscriber base by 1.9 million customers to finish the quarter with 47.4 million.
The wireless operation also improved on its industry-leading subscriber retention, reducing the rate of customer losses to 1.2 percent of the subscriber base per month. By contrast, top rival Cingular Wireless reported a “churn” rate of 2.2 percent for the second quarter.
However, the gains in market share and reduction in churn came with a sacrifice: Average revenue per user fell 2.7 percent to $49.42 per month compared with a year earlier, a sign of the aggressive pricing that Verizon Wireless needed to win new customers and keep old ones.
incurs heavy losses
Electronic Arts swung to a loss in its fiscal first quarter as the world’s largest video-game maker was pressured by increased competition that caused revenue to shrink 16 percent. In its report yesterday, the company also lowered its full-year sales and profit outlook.
For the three months ended June 30, Electronic Arts lost $58 million, or 19 cents per share, down from a profit of $24 million, or 8 cents per share, a year ago.
The results were slightly better than analysts anticipated. The mean estimate of analysts polled by Thomson Financial was for a loss of 24 cents per share.
Revenue fell to $365 million, down from $432 million in the prior year.
In its report yesterday, the company also lowered its full-year sales and profit outlook after announcing that it would delay the release of a highly anticipated game based on the 1970s-era “The Godfather” films.
Leading up to the report, the company’s shares fell $2.90 to close at $59. The earnings report was released after the close. They shed another $1.49 after the report was released.
Tech business helps
offset jet sales dip
Lockheed Martin’s second-quarter earnings rose 56 percent as the defense contractor best-known for its fighter jets showed yesterday how it has adapted to change with the military it supplies.
The nation’s largest defense contractor has pushed to build up its government information-technology business and electronic-systems unit, which makes products like surveillance systems and missiles. Higher sales spurred by recent investments in this segment helped offset a dip in fighter-jet sales.
Lockheed also raised its full-year earnings outlook above Wall Street’s expectations. After the news, its shares rose $1.48 to close at $63.99 yesterday.
Lockheed reported second-quarter earnings of $461 million, or $1.02 per share, up from $296 million, or 66 cents per share, in the year-earlier period. Sales rose 6 percent to $9.3 billion from $8.8 billion.
Analysts surveyed by Thomson Financial expected Lockheed would earn 83 cents per share in the quarter on sales of $9.12 billion.
spurs profit gain
DuPont, one of the nation’s biggest chemical companies, yesterday said second-quarter profit more than doubled, aided by one-time gains. But its stock skidded more than 6 percent as its earnings without the gains missed Wall Street’s forecasts.
DuPont, whose products range from auto finishes to textiles and genetically modified seeds, reported earnings of $1.01 billion, or $1.01 per share, for the three months ending June 30 compared with $503 million, or 50 cents per share, in the prior-year period.
The quarter’s results included a net benefit of $111 million from asset sales, the favorable settlement of a tax audit, and restructuring costs. The result was an increase to earnings of 11 cents per share, DuPont said.
Without the one-time gain, its earnings would have been 90 cents a share, well below the 96 cents that analysts surveyed by Thomson Financial expected.
Shares of DuPont, a Dow Jones industrial stock, dropped $2.89 to close at $41.15 yesterday.
Sun Microsystems posted a fourth-quarter profit yesterday, beating Wall Street expectations as the server and software maker said demand has stabilized after a long decline that started with the dot-com bust of 2000.
For the period ended June 30, Sun earned $121 million, or 4 cents per share, compared with a profit of $783 million, or 23 cents per share, in the second quarter of fiscal 2004. The year-ago profit included $1.6 billion in other income from a settlement with Microsoft.
Sales slipped 4.2 percent, to $2.98 billion from $3.11 billion last year.
Excluding special items, Sun earned $200 million, or 6 cents per share, compared with a loss of $173 million, or 5 cents per share, last year. Analysts were expecting a profit of 1 cent per share on sales of $2.98 billion, according to Thomson Financial.
Sun shares closed unchanged at $3.85 yesterday before the fourth-quarter results were announced. In the extended session, they gained 14 cents.
as losses increase
Northwest Airlines, which operates the nation’s fourth-largest airline, reported yesterday its second-quarter loss widened to $225 million and warned that it needs pension reform and labor-cost cuts to stay out of Chapter 11 bankruptcy proceedings.
Chief Executive Doug Steenland said tighter bankruptcy laws that take effect Oct. 17 will be one factor in whether it files for bankruptcy protection, though he said it’s not a deadline.
“Frankly we are running out of phrases to describe our results in recent quarters. They are clearly unacceptable,” Steenland said.
Northwest lost $2.59 per share in the quarter ending June 30, versus a loss of $182 million, or $2.11 per share, a year ago. Excluding $54 million worth of unusual items, the airline would have lost $279 million, or $3.21 per share.
That was slightly better than a loss of $3.29 per share on revenue of $3.079 billion predicted by analysts surveyed by Thomson Financial.
Northwest reported that revenue rose to $3.195 billion from $2.87 billion in 2004.
Northwest shares rose 43 cents to close at $4.88 yesterday.
Compiled from The Associated Press