Wall Street has a name for the Baby Bells. They are "cockroaches." A meteor squelched a lot of the long-distance and broadband sectors, but Verizon Communications'
Verizon's local phone business, like that at SBC Communications
Sure, the foundation of its old business is buckling. But Verizon is offsetting those losses with an aggressive push into wireless, broadband Internet, and long-distance services. It's still too early to say for sure, but 6% top-line revenue growth could be evidence that Verizon is successfully making the move from stodgy old phone company to whizzy, modern communications company.
Verizon said it added 280,000 digital subscriber line (DSL) customers and posted 15% growth in long-distance revenue.
The big story, however, is wireless. Verizon Wireless, the company's joint venture with Vodafone
Price-cutting and competition from cable companies and wireless resellers don't appear to have damaged Verizon's bottom line. While earnings growth remained pretty much flat from last year, Verizon's operating margins jumped to 21% from 16% a year earlier. Healthy free cash flow gives Verizon plenty of room to maintain its 5.1% dividend yield.
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Fool contributor Ben McClure doesn't own shares of any companies mentioned in this article.