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Verizon Reports Q1

Verizon reports earnings of $1.6B, or 56 cents per diluted share, compared with $1.8 billion, or 63 cents per share, in Q1 of 2005

May 2, 2006

2 Min Read

NEW YORK -- Verizon Communications Inc. (NYSE: VZ - News) today reported strong financial and operational results for the first quarter 2006. Verizon Wireless continued to lead the industry in profitable growth and customer loyalty, and Verizon's wireline business sustained industry-leading levels of broadband customer growth and, after the completion of the MCI, Inc. merger, greatly expanded its global presence in business and government markets.

For the first quarter 2006, Verizon reported earnings of $1.6 billion, or 56 cents per diluted share, compared with $1.8 billion, or 63 cents per share, in the first quarter 2005. Reported earnings in the first quarter 2006 reflect 4 cents per share in special items for employee relocations and merger integration costs, the early extinguishment of debt, and the cumulative effect of an accounting change. Before these special items (non-GAAP), Verizon's earnings were 60 cents per share in the first quarter 2006.

Consolidated operating revenues in the first quarter 2006 were $22.7 billion, a 25.1 percent increase compared with the first quarter 2005; consolidated total operating expenses were $18.9 billion, a 27.6 percent increase compared with the first quarter 2005; and consolidated operating income was $3.9 billion, a 14.0 percent increase compared with the first quarter 2005. Reported results include MCI subsequent to the close of the merger on Jan. 6, 2006.

On a pro-forma basis (non-GAAP), comparing first quarter 2006 with first quarter 2005, adjusted earnings per share decreased 3.3 percent, adjusted operating revenues increased 3.1 percent and adjusted operating income increased 13.5 percent. Adjusted operating income margins would have been 17.2 percent in first quarter 2006, compared with 15.6 percent in first quarter 2005. Pro-forma adjusted information presents the combined operating results of Verizon and the former MCI on a comparable basis.

'Driving Revenue Growth'

"Our financial performance in the first quarter was on target, and we are focused on driving revenue growth in each of our business segments," said Ivan Seidenberg, Verizon chairman and CEO. "Our goal is simple: Given the quality of our superior networks and customer service, we expect Verizon Wireless and our wireline segment -- Verizon Telecom and Verizon Business -- to lead the industry, not necessarily in size but in profitable growth.

"Verizon Wireless is already there, and this quarter it has once again enhanced its position as the industry leader in terms of network reliability and customer loyalty. Verizon Telecom is taking the necessary steps to ramp up revenue growth from fiber-based FiOS data and TV services, and Verizon Business is already seeing revenue growth in strategic IP-based business services.

"This quarter also demonstrates Verizon's continued focus on delivering increased value to shareowners as well as to customers. We have repurchased shares, and we are divesting operations that are not core to our strategy of building network-based businesses that create new markets and drive profitable growth."

Verizon Communications Inc. (NYSE: VZ)

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