Verizon Communications (NYSE:VZ) reported second-quarter results before the market open this morning. The largest U.S. wireless carrier's revenue came in slightly below Wall Street's expectations, but earnings per share beat consensus estimates. By 10:50 a.m., shares were down about 2.6%.

Wireless results
Verizon added 1.1 million new monthly wireless subscribers in the second quarter, despite analyst expectations of only 1.05 million, according to Bloomberg. In addition, Verizon's retail postpaid churn rate of 0.90% was the lowest in three years. That's impressive because it shows that Verizon is not only adding new customers, it's also doing an excellent job of keeping its existing customers. Combined, that helped Verizon's total retail connections rise 4.7% to 109.5 million nationwide at the end of the second quarter.

The strong subscriber numbers helped drive a 5.3% year-over-year increase in wireless revenue to $22.6 billion. Profitability also improved, with operating margin rising to 34% from 32.5% in the second quarter of 2014 and segment EBITDA (earning before interest, taxes, depreciation, and amortization) margin increasing to 43.9% from 42.3%.

Wireline results 
In Verizon's wireline division, FiOS remains a bright spot. Verizon added 72,000 net new FiOS Internet connections and 26,000 net new FiOS Video connections in Q2. That helped bring Verizon's totals to 6.8 million FiOS Internet and 5.8 million FiOS Video connections at the end of the second quarter, representing year-over-year increases of 8.1% and 6.4%, respectively. Together, that drove a 10% rise in FiOS revenue compared to the year-ago quarter.

Profitability also improved in Verizon's wireline division in Q2, with operating margin increasing to 5.3% from 2.6% in the second quarter of 2014 and segment EBITDA margin rising slightly to 23.5% from 23.4%. Still, as the world continues to shift toward more mobile-based communications, Verizon's wireline operations remain a declining business, with total operating revenues declining 2% to $9.4 billion.

Consolidated results 
All told, Verizon's total operating revenue rose 2.4% to $32.2 billion in the second quarter. That was slightly below the $32.45 billion Wall Street expected. Earnings per share, however, increased 3% to $1.04, which was above the $1.01 analysts projected.

More importantly, Verizon remains a cash-flow-generating machine; even after adjusting for a non-reoccurring $2.4 billion gain related to the monetization of tower assets in the first quarter, operating cash flow increased to $16.5 billion in the first six months of 2015, up from $14.8 billion in the first half of 2014. And adjusted free cash flow totaled $8.4 billion in the first half of 2015, up from $6.3 billion in the year-ago period.

Regarding its consolidated revenue outlook, management expects "a higher year-over-year growth rate in third-quarter 2015 than in second-quarter 2015." And for the full year, management estimates revenue will grow at least 3%.

"Verizon has delivered another quarter of strong financial and operational results, based on consistent network reliability and superior value that continues to attract new customers," said Chairman and CEO Lowell McAdam in a press release. "In the second quarter, we again balanced quality Verizon Wireless connections growth with low churn and profitability, and we announced and completed our acquisition of AOL. We're now poised to offer customers exciting new over-the-top (OTT) mobile video services, and we look forward to a very positive second half of 2015."