Leading U.S. telecom provider Verizon Communications (NYSE: VZ) did its part to restore faith in the economy by releasing solid third-quarter earnings to the market this morning. While last quarter displayed how Verizon is certainly taking a hit from the souring economy, this quarter's results show that the issues are manageable.
Despite struggles to retain customers in traditional telephony services, Verizon made up for it in other areas and delivered $24.8 billion in revenue this quarter. Once again, strong results from investments in wireless and broadband helped carry the business and deliver $1.67 billion in net income. Investors welcomed the news, bidding shares of Verizon up by more than 10% midway through the day.
Verizon continues to convert customers to its new broadband television and Internet offering, FiOS, netting 233,000 TV and 225,000 Internet customers in the quarter. Wireless operations continue to grow at double-digit rates as well. Verizon integrated customers from its Rural Cellular acquisition this quarter, helping it post 2.1 million new wireless customers to its role.
One metric that stood out in Verizon's wireless results was a slight uptick in customer churn to 1.33%, above the 1.12% last quarter and even the 1.27% last year. Though this low turnover still leads the industry, there's no denying that AT&T (NYSE: T) is winning Verizon customers over with the latest Apple (Nasdaq: AAPL) iPhone. Verizon management continues to emphasize a broad-based portfolio of devices, though, rather than being, in the words of President and COO Denny Strigl, "wedded to just any one iconic device".
I'm sure Verizon would be happy to jump on the "iconic device" bandwagon, though, should the new Blackberry Storm from Research In Motion (Nasdaq: RIMM) become a big hit this holiday season. The touchscreen Blackberry offers the best competition yet to the iPhone, Sprint Nextel's (NYSE: S) Instinct, and the HTC Dream from Deutsche Telekom's (NYSE: DT) T-Mobile USA. Verizon Wireless will be the exclusive seller of the device in the U.S., while partner Vodafone (NYSE: VOD) will offer it in Europe, India, Australia, and New Zealand.
Even after today's jump, shares of Verizon are near the lowest price they've seen in more than a decade. While I wouldn't call Verizon a screaming bargain at this level, its consistency in operations and 6.6% dividend yield certainly make it an attractive alternative to many other stocks.
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