If you thought the overused corporate buzzword "multitasking" had long been put to rest, think again. Telecommunications giant Verizon Communications (NYSE: VZ) proved yesterday that simply giving attention to one thing at a time is so 1980s. The company decided to throw analysts a curve ball by simultaneously reporting second-quarter earnings and a major acquisition.
On the earnings front, the company again turned in another solid quarter, led by strength in wireless and broadband business units. Overall, revenue was up 6% to $23.3 billion, with profits of $1.7 billion, or $0.58 per share. Wireless revenues jumped 17% from the year-ago quarter, with subscribers spending more on voice, text, and media. And broadband connections increased 26%, as more consumers signed up for lightening-fast Internet connections thanks to Verizon's new fiber optic network.
The wireless portion of Verizon's business that the company shares with Vodafone (NYSE: VOD) continues to stand out in the financial results, with metrics that are tough to match. The carrier added 1.3 million subscribers overall, lower than in previous quarters but still solid in a mature market. The company also kept its clear lead over rivals Sprint Nextel (NYSE: S), AT&T (NYSE: T), and Deutsche Telekom's (NYSE: DT) T-Mobile in total customer churn, which came in at 1.3% this quarter. Each of these metrics took a significant hit from the bankruptcy of Amp'd, however, as Verizon had to cut 300,000 of the reseller's subscribers from its books. Average revenue per user (ARPU) also saw a nice increase in the quarter, up 3% to $51.05.
As if earnings from a telco giant were not enough to digest in one day, Verizon decided to make public its intentions to acquire rural wireless carrier Rural Cellular (Nasdaq: RCCC). Verizon will be paying $2.67 billion in cash and assumed debt. The logic behind the deal is similar to AT&T's recent move to acquire Dobson Communications (Nasdaq: DCEL) -- cut costs by saving on roaming fees. Also, Verizon figures the combined company can save $1 billion in synergies -- a.k.a. staff reductions or "normal involuntary attrition," as some companies like to refer to it.
Taken together, both announcements bode well for Verizon's future. If the company can successfully integrate Rural Cellular while maintaining its current performance, shareholders should be more than happy.
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Fool contributor Dave Mock can multitask by walking and chewing gum at the same time. He owns no shares of companies mentioned here. He is the author of
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