Verizon earnings up 4.5 pct By PETER SVENSSON, AP Technology Writer

Verizon earnings up 4.5 pct By PETER SVENSSON, AP Technology Writer
Mon Jul 30, 9:08 AM ET



NEW YORK - Verizon Communications Inc. on Monday reported second-quarter earnings that rose 4.5 percent from a year ago, mainly due to its successful cell phone division. The results met analysts' expectations.

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Verizon, the country's second largest telecommunications company, earned $1.68 billion, or 58 cents per share, in the March to June period, up from $1.61 billion, or 55 cents per share, in the same quarter last year.

Last year's figure included the earnings from a number of business that have since been sold or spun-off, including the high-margin Yellow Pages business. Excluding those businesses, earnings in last year's second quarter were 43 cents per share.

Analysts polled by Thomson Financial were expecting earnings of 58 cents a share in the most recent quarter.

Revenue came to $23.3 billion, up 6.3 percent from $21.9 billion a year ago.

Verizon shares were up 45 cents at $42.45 in premarket trading.

Meanwhile, Verizon Wireless said Monday it has agreed to buy Rural Cellular Corp., which provides cell phone service in 15 states under the Unicel brand, for $757 million, or $45 per share.

Rural Cellular, based in Alexandria, Minn., has 716,000 subscribers. Some of them use phones with the same technology that Verizon Wireless uses, called CDMA, while others use GSM phones compatible with AT&T's and T-Mobile USA's networks.

Verizon Wireless said it plans to convert the GSM subscribers to CDMA service, but will maintain the GSM network for roaming by subscribers of other carriers.

Verizon is taking on about $1.9 billion in debt along with the acquisition, but said it expected the acquisition to save it $1 billion in roaming fees and operations expenses.

Verizon Wireless added 1.6 million new customers in the second quarter, but lost 300,000 through the bankruptcy of Amp'd Mobile, which bought wholesale access to Verizon Wireless' network and resold it. Verizon Wireless ended the quarter with 62.1 million subscribers, just short of AT&T's 63.7 million.

Verizon Wireless is a joint venture of Verizon Communications and Vodafone Group PLC of Britain. All of its revenue is counted on Verizon Communications' books, but only 55 percent of its profits — the rest go to Vodafone.