Verizon profit dips, but wireless stays strong

Verizon Communications posted on Monday a third-quarter dip in profits, though the company's wireless business showed strong results.

The carrier's overall profits were hurt by the continued decline of its wireline business. But the company is making up for much of the loss with wireless.

That said, Verizon did not add as many customers in the third quarter as AT&T, which had a stellar quarter due to strong sales of the Apple iPhone. Verizon is hoping to pick up ground through its broad partnership with Google announced earlier this month. In addition, Verizon is adding Research In Motion's new Storm 2 to its lineup.

Verizon reported third-quarter net income of $2.88 billion, or 41 cents a share, on revenue of $27.3 billion. Excluding charges, per share earnings fell to 60 cents from 66 cents last year, but the company beat analyst estimates of 59 cents per share.

Verizon's total operating revenue grew 10 percent to $27.3 billion, compared with the third quarter of 2008. This includes revenue from Verizon Wireless and Alltel. If Alltel, the regional wireless operator Verizon acquired in January, had been part of Verizon a year earlier, the revenue increase would have been 0.6 percent.

Verizon Wireless, which is jointly owned by Vodafone Group, continued to show strong growth, despite competition. The company added 1.2 million new customers in the quarter, bringing its total customer base to 89 million. It reported a churn rate for its contract customers of 1.13 percent.

Verizon Wireless also increased its revenue by 24 percent in the third quarter to $15.8 billion. Much of this growth is due to an increase in data services. As the company offers more sophisticated phones, it is requiring more of its customers to sign up for some type of data plan.

Overall wireline revenue fell 4.8 percent to $11.6 billion. Much of the decline comes from customers ditching wireline phone service. That said, Verizon is looking toward its Fios fiber-to-the-home network to provide growth.

The company added 198,000 Fios Internet customers and 191,000 Fios TV customers in the quarter, boasting a 12.6 percent increase in average revenue per user.