Verizon’s Low ‘Churn’ Means Higher Profits

Verizon Communications Inc. (NYSE: VZ) reported this week growth in its wireless earnings as well as growth in its wireless subscriber base, leading the company to $1.07 billion, or 37 cents a share in profits, slightly above analyst projections.

On an annual basis, Verizon reported 2007 EPS of $1.90, compared with $1.88 per share from continuing operations a year earlier. On an adjusted annual basis, 2007 EPS was $2.36, a 14.6 percent increase, compared with 2006 EPS of $2.06 from continuing operations.

The company also reported that its customer churn was 1.2 percent for the quarter, up from 1.1 percent in the quarter a year ago. AT&T reported customer churn of 1.7 percent when the company released earnings last week. By keeping churn low, Verizon added 2 million net wireless customers, growing to 65.7 million wireless customers.

Wireleine customers grew as well, as the customer added to its FiOS television service, gaining 226,000 net customers, growing to a total of more than 1 million.

“Throughout 2007 Verizon's results consistently showed success in what we set out to do: grow revenue, capture market share, improve margins, increase productivity and provide the best customer experience,” said Verizon chairman and CEO Ivan Seidenberg in a prepared statement. "In 2008 we are focused on these same strategic imperatives. We see significant opportunities to grow revenues and expand our leadership in wireless and broadband markets, while reducing operating expenses.”