Verizon's Q3 Profits Up

The second largest telephone company in the U.S, Verizon Communications showed healthy signs as its third quarter profit jumped by 2.8%. This can mainly be attributed to the increase in the number of wireless technology users.

Verizon Wireless added another 1.9 million customers to its existing user base, the total customers figure now stand at 56.7 million; it has beaten the expectations and predictions of the analysts. The mobile phone unit, 55% of which is owned by the Verizon group (rest 45% is with Vodafone) was the main reason behind the profits even covering the dip in the number of local line users.

Verizon, like its bigger rival AT&T Inc. (T.N), has also benefited from substantial growth in mobile phone subscriptions in the past few years, as traditional phone line users continue to decline.

Verizon has lost 419,000 home phone lines during the third quarter; however this was compensated by adding 539,000 residential broadband users. Verizon Wireless revenues grew 18.2 percent to $9.9 billion.

The other larger rival of Verizon, Cingular Wireless LLC added about 1.4 million users. The net income at Verizon has risen at 66 cents a share to $1.92 billion surpassing the $1.87 billion figure in the same quarter last year. Also buoyed by the purchase of MCI Inc. in January the sales have risen to $23.3 billion, up by 26%. Gaining about 29% in the value of shares in this year, the trading at the New York Stock Exchange hovered around $38.80.

"Verizon continues to win customers and market share for wireless, broadband and enterprise services," said CEO Ivan Seidenberg. He further said, “These organic growth initiatives gained momentum in the third quarter, and we are confident this growth is sustainable. We are building long-term shareholder value on a foundation of infrastructure and technology investment, supported by innovative marketing and customer service initiatives."

Formed in mid 2000 by the acquisition of GTE by Bell Atlantic with a deal valued at over $52 billion, it has now grown to a firm with employee strength of 250,000. It provides host of voice, video and data services across the U.S.