Here it is halfway through 2007 -- the basketball and hockey seasons are behind us, and the sleepy summer heat is settling in. The lull before second-quarter earnings gives us a good opportunity to review company performance, so we'll step up to the plate and take a look at U.S. telecommunications service provider Verizon Communications (NYSE:VZ). Let's see how the company has performed so far and what may be on the horizon for the balance of 2007.

First-half review
Shares in Verizon Communications have lumbered to a slightly market-beating 11% gain this year, as the company has shown steady improvements in two important areas of business -- wireless and next-generation broadband. Verizon Wireless, which is a joint venture the company has established with Vodafone (NYSE:VOD), continues to lead competitors such as AT&T (NYSE:T) and Alltel (NYSE:AT) with a rock-bottom customer churn rate. The company is also investing heavily to rapidly roll out its fiber optic network -- called FiOS -- to homes around the country.

The rollout of broadband services is designed to help the company improve margins and fight off competition from cable companies such as Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC). The company has even been using legal recourse to keep Vonage (NYSE:VG) from siphoning off customers with its own patented technology.

Second-half prospects
To get a peek at what top investors think of Verizon Communications' prospects into the future, we can tap the Motley Fool CAPS database of investor opinions and ratings on the stock. While most players and all 11 Wall Street firms tracked in CAPS rate Verizon as an outperform, the company sports only a middle-of-the-road three-star rating.

I share concerns that many CAPS investors have about Verizon's ability to compete with the variety of threats facing the telecom giant. The company's heavy investments in fiber optics, though a drag on present cash flow, should benefit it over the long term. And while margins need some work, cash flow is still strong and shareholders are feasting on a 3.9% dividend yield while waiting for efficiencies to materialize.

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Fool contributor Dave Mock could use some more fiber in his diet. He owns no shares of the companies mentioned here. He is the author of The Qualcomm Equation. Vodafone is an Inside Value recommendation. The Fool's disclosure policy is fortified with all the essential vitamins for healthy growth.