Click to Skip Ad
Closing in...

Verizon adds 872,000 subscribers, doubles profit in fourth quarter

Updated Dec 19th, 2018 7:00PM EST

If you buy through a BGR link, we may earn an affiliate commission, helping support our expert product labs.

Shares of Verizon Communications stock slid over 1% in after-hours trading Tuesday morning as the company reported its fourth quarter earnings. Despite almost doubling profit from $2.37 billion in the fourth quarter of 2009 to $4.65 billion in 2010, earnings of $0.54 per share missed the Street’s consensus of $0.55 per share and revenue fell 2.6% to $26.4 billion. Subscriber growth of 872,000 net postpaid customers crushed Wall Street’s consensus, however, which sat in the mid-600,000s. “Verizon ended 2010 with strong results, driven by solid execution across all our businesses,” Verizon CEO Ivan Seidenberg said in a statement. “The fourth quarter capped a strong second half of the year, resulting in improved earnings, solid momentum and an even stronger balance sheet. Verizon Wireless produced another quarter of impressive growth, with record-high profitability, as we continue to drive higher smartphone adoption and data use. Following another solid quarter in our wireline businesses, we are optimistic about opportunities to continue to expand wireline margins.” Verizon also noted that only 26% of Verizon Wireless’ 83 million postpaid wireless subscribers owned smartphones at the close of 2010. This creates a tremendous opportunity for the carrier as it prepares to launch the iPhone 4 next month. Hit the break for Verizon’s full press release.

Verizon Reports Strong 4Q and Year-End 2010 Results, Highlighted by Cash Flow, Wireless and FiOS Growth

Gains Reported in 4Q Wireless and Wireline Margins; Solid Results Across Verizon Wireless, Consumer Wireline and Global Business

January 25, 2011 –



  • 93 cents in diluted earnings per share (EPS), including 39 cents per share in net non-operational gains, compared with 22 cents in EPS (as adjusted) in 4Q 2009, including 28 cents per share in non-operational charges.
  • Continued cash flow growth in quarter, contributing to $33.4 billion in cash flow from operations in 2010 and $16.9 billion in free cash flow (non-GAAP).


  • 7.7 percent increase in service revenues from 4Q 2009; data revenues up 25.5 percent; 30.1 percent operating income margin and 47.5 percent Segment EBITDA margin on service revenues (non-GAAP).
  • 955,000 total net customer additions, excluding acquisitions and adjustments, in 4Q 2010; includes 872,000 retail postpaid net customer additions in the quarter; continued low retail postpaid churn of 1.01 percent.
  • 102.2 million total connections, includes 94.1 million total customers.


  • 197,000 net FiOS Internet and 182,000 net FiOS TV customer additions; 4.1 million total FiOS Internet customers and 3.5 million total FiOS TV customers.
  • 10.7 percent increase in consumer ARPU from 4Q 2009; FiOS revenues now represent approximately 53 percent of total consumer revenues.
  • 7.5 percent increase in strategic enterprise revenues, which now represent approximately 44 percent of total global enterprise revenues.

NEW YORK – Continued strong cash flow and growth in Verizon Wireless, FiOS and strategic enterprise services highlighted fourth-quarter and year-end 2010 earnings reported today by Verizon Communications Inc.

The company reported 93 cents in EPS in fourth-quarter 2010, compared with 22 cents per share (as adjusted) in fourth-quarter 2009.  Fourth-quarter 2010 results included 39 cents per share in net non-operational gains: 50 cents per share primarily from the annual actuarial valuation of Verizon’s pension assets, partially offset by 6 cents per share for severance and other related charges, and 5 cents per share for Alltel merger integration costs.  Fourth-quarter 2009 results included 28 cents per share in non-operational charges.

On an annual basis, Verizon reported 90 cents in 2010 EPS, compared with $1.72 (as adjusted) in 2009.

Improved Earnings and Solid Momentum

“Verizon ended 2010 with strong results, driven by solid execution across all our businesses,” said Verizon Chairman and CEO Ivan Seidenberg.  “The fourth quarter capped a strong second half of the year, resulting in improved earnings, solid momentum and an even stronger balance sheet.  Verizon Wireless produced another quarter of impressive growth, with record-high profitability, as we continue to drive higher smartphone adoption and data use.  Following another solid quarter in our wireline businesses, we are optimistic about opportunities to continue to expand wireline margins.”

Strong Cash Flow Growth in 2010

Cash flow from operations totaled $33.4 billion in 2010, compared with $31.4 billion in 2009.  Capital expenditures totaled $16.5 billion in 2010, down $400 million from 2009.  For 2010, free cash flow (non-GAAP; cash flow from operations less capital expenditures) totaled $16.9 billion, a 16.4 percent year-over-year increase.

On a consolidated basis, Verizon’s total operating revenues were $26.4 billion in fourth-quarter 2010, a decrease of 2.6 percent compared with fourth-quarter 2009.  Last year’s results included revenues from operations that have since been divested.

On a comparable basis (non-GAAP), fourth-quarter 2010 total operating revenues increased $592 million, or 2.3 percent, compared with fourth-quarter 2009.

Wireless Delivers Continued Strong Growth and Profitability

Verizon Wireless delivered strong growth in revenues, strong retail postpaid ARPU (average monthly service revenue per user), and growth in traditional customers and other connections.  Wireless service EBITDA margin was a record high.  In the fourth quarter of 2010:

  • Verizon Wireless added 872,000 retail postpaid customers, and 803,000 total retail customers, which includes a decrease of 69,000 retail prepaid customers.  These additions exclude acquisitions and adjustments.
  • At the end of the fourth quarter, the company had 87.5 million retail customers, which represented 93 percent of the company’s wireless customers.
  • The company also added 152,000 reseller customers in the fourth quarter.
  • The company had a total of 94.1 million customers at the end of the fourth quarter.  In addition, the company had 8.1 million other connections – such as machine-to-machine and telematics.  This was an increase of 186,000 net other connections in the quarter, and brought the number of total wireless connections to 102.2 million at year-end 2010.
  • At year-end 2010, 26 percent of Verizon Wireless’ retail postpaid customer base had smartphone devices, up from 15 percent at year-end 2009.  In fourth-quarter 2010, more than 75 percent of Verizon Wireless’ postpaid net adds were smartphones.
  • Retail postpaid churn remained low at 1.01 percent.  Total retail and total customer churn levels were 1.37 and 1.34 percent, respectively.  All churn levels improved year over year and sequentially.
  • Retail service revenues in the quarter totaled $13.5 billion, up 5.1 percent year over year.  Retail data revenues were $5.0 billion, up 22.8 percent year over year.  Service revenues in the fourth quarter were $14.2 billion, up 7.7 percent year over year.  Total revenues were $16.1 billion, up 5.7 percent year over year.  For full-year 2010, service revenues were $55.6 billion, up 6.9 percent over full-year 2009; total revenues were $63.4 billion, up 5.1 percent year over year.
  • Retail postpaid ARPU grew 2.5 percent over the fourth-quarter 2009, to $53.50.  Retail postpaid data ARPU increased to $19.97, up 19.3 percent year over year.  In addition, retail service ARPU grew 2.4 percent over fourth-quarter 2009, to $51.84.
  • Wireless operating income margin was 30.1 percent, an increase of 340 basis points year over year.  Segment EBITDA margin on service revenues (non-GAAP) was 47.5 percent, up 290 basis points over fourth-quarter 2009.  For full-year 2010, operating income margin was 29.5 percent, up 190 basis points over full-year 2009; segment EBITDA margin on service revenues was 46.9 percent, up 140 basis points.

Continued Growth for FiOS and Strategic Enterprise Services

In wireline businesses, Verizon continued to add customers served by its FiOS fiber-optic network in the U.S., and revenues continued to increase for strategic enterprise services worldwide.  In the fourth quarter of 2010:

  • Verizon added 197,000 net new FiOS Internet customers and 182,000 net new FiOS TV customers.  By year-end, Verizon had 4.1 million FiOS Internet and 3.5 million FiOS TV customers.
  • FiOS Internet penetration (customers as a percentage of potential customers) was 31.9 percent by the end of the quarter, with the product available for sale to 12.8 million premises.  This compares with 28.3 percent and 11.6 million, respectively, at year-end 2009.
  • FiOS TV penetration was 28.0 percent by the end of the quarter, with the product available for sale to 12.4 million premises.  This compares with 24.7 percent and 11.1 million, respectively, at year-end 2009.
  • FiOS revenues generated approximately 53 percent of consumer wireline revenues in fourth-quarter 2010, compared with approximately 50 percent in third-quarter 2010.
  • Total wireline broadband and video revenues – including FiOS Internet, FiOS TV and HSI (DSL-based high-speed Internet) – were $1.8 billion in the quarter, up 18.4 percent from fourth-quarter 2009.
  • Consumer revenues grew 1.6 percent compared with fourth-quarter 2009.  Consumer ARPU for wireline services was $88.85 in fourth-quarter 2010, up 10.7 percent compared with fourth-quarter 2009.  ARPU for FiOS customers is more than $146.
  • Global enterprise revenues totaled $4.0 billion in the quarter, up 1.3 percent compared with fourth-quarter 2009.  Sales of strategic enterprise services – such as security and IT solutions, as well as strategic networking – increased 7.5 percent compared with fourth-quarter 2009 and now represent approximately 44 percent of global enterprise revenues.
  • Segment EBITDA margin (non-GAAP) was 23.5 percent, compared with 22.7 percent in third-quarter 2010 and 22.5 percent in fourth-quarter 2009, as adjusted.

Additional Highlights


  • At Verizon Wireless, monthly cash expense per customer (non-GAAP) decreased in the fourth quarter 2010 to $26.59 from $27.72 in the fourth quarter 2009.  For the full year, cash expense per customer was $26.80, down 2.7 percent from $27.55 in 2009.
  • In the fourth quarter, total data revenues were 37.1 percent of all service revenues, up from 31.8 percent in the fourth quarter 2009.
  • Verizon Wireless continued to invest in its 3G (third-generation) broadband network, the nation’s largest and most reliable 3G network.  Verizon’s 3G network provides more coverage than any other U.S. carrier and is available where more than 290 million people reside.
  • In December, Verizon Wireless launched its 4G LTE (fourth-generation Long Term Evolution) Mobile Broadband network, the fastest and most advanced 4G network in the U.S., in 38 major metropolitan areas covering one-third of all Americans and in more than 60 commercial airports.  With Verizon Wireless’ 4G LTE network, laptop users experience average data throughput speeds of up to 10 times faster than when on the company’s 3G network.  Verizon Wireless announced earlier this month that it would expand its 4G LTE network to an additional 140 markets by the end of 2011.
  • Concurrent with the launch of its 4G LTE Mobile Broadband network, Verizon Wireless introduced two 4G LTE USB modems:  the LG VL600 and the Pantech UML290, which are also compatible with the company’s 3G network.  Verizon Wireless unveiled 10 new 4G LTE consumer devices at the International Consumer Electronics Show earlier this month, including smartphones, tablets, mobile hot spot devices and notebooks that will be available in the first half of this year.
  • On Jan. 11, Verizon Wireless announced the iPhone 4 will be available to customers beginning in February.
  • During the fourth quarter, Verizon Wireless customers sent or received more than 180 billion text messages.  Customers also sent nearly 4.5 billion picture/video messages and completed more than 20 million music and video downloads from Verizon Wireless.


  • Fourth-quarter 2010 operating revenues were $10.3 billion, a decline of 2.8 percent compared with fourth-quarter 2009.  Fourth-quarter 2010 cash operating expenses (non-GAAP) were $7.9 billion, a decline of 3.9 percent compared with fourth-quarter 2009.
  • Broadband connections totaled 8.4 million at the end of the fourth quarter 2010, a 2.8 percent year-over-year increase.  This is a net increase of 52,000 from the third quarter 2010, as the increase in FiOS Internet connections more than offset a decrease in HSI connections.
  • As of year-end 2010, the FiOS network passed 15.6 million premises, or approximately 60 percent of Verizon’s domestic wireline footprint following the close of the Frontier transaction on July 1, 2010.
  • The wireline workforce totaled 92,300 at year-end 2010, a decline of about 16,000 year over year, primarily as a result of incentive offers that have led to voluntary separations.
  • During the quarter, Verizon continued to deploy secure global IT and communications solutions that enable better business outcomes for multinational enterprise, medium-sized and government customers wherever and whenever they operate.  These solutions included additional capabilities that support the company’s “everything-as-a-service” cloud strategy, as well as a platform for developing enterprise mobility applications and new unified communications professional services.  Additionally, top industry analysts recognized Verizon leadership in a number of key areas, including for managed security services in the North America, Europe and Asia-Pacific regions.
  • Verizon expanded its global network infrastructure during the quarter as it continued to broaden its global scope and capabilities.  The company installed 16 additional Private IP edge routers for a total of 814 edge routers in 233 sites throughout 61 countries; implemented the first production deployment of a true 100G (gigabit-per-second) transmission system on the Verizon backbone network; launched its packet optical transport platform initiative for Private IP and Ethernet services in the Asia-Pacific, Europe and Latin America regions; and installed 22 new nodes in the Switched Ethernet Service network in support of a fiber-to-the-cell-site initiative in the U.S.
  • Multinational corporations, including Carlsberg and National Grid, completed new agreements, expanding their relationships with Verizon for a wide range of advanced communications and IT solutions.  Verizon also continued to win new government business, including an award from the U.S. General Services Administration to provide secure on-demand cloud computing service.

NOTE: Effective with the fourth quarter 2010, Verizon changed its method of accounting for pension and post-employment benefits.  Accordingly, all prior periods have been adjusted for this change, which primarily affected Verizon Consolidated and the Wireline segment.  Reclassifications of prior period amounts have been made, where appropriate, to reflect comparable operating results for the divestiture of overlapping wireless properties in 105 operating markets in 24 states during the first half of 2010; the wireless deferred revenue adjustment that was disclosed in Verizon’s Form 10-Q for the period ended June 30, 2010; and the spinoff to Frontier of  local exchange and related landline assets in 14 states, effective on July 1, 2010.  See the accompanying schedules for reconciliations to generally accepted accounting principles (GAAP) for non-GAAP financial measures cited in this document.

Verizon Communications Inc. (NYSE, NASDAQ:VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to mass market, business, government and wholesale customers.  Verizon Wireless operates America’s most reliable wireless network, serving 94.1 million customers nationwide.  Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and delivers innovative, seamless business solutions to customers around the world.  A Dow 30 company, Verizon employs a diverse workforce of more than 194,000 and last year generated consolidated revenues of $106.6 billion.  For more information, visit

Zach Epstein
Zach Epstein Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content. Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment.

His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.