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Verizon Reports Flat Quarterly Earnings

As it works to shed land lines, the phone giant makes strides in the wireless world.

October 29, 2004|James S. Granelli | Times Staff Writer

Verizon Communications Inc. on Thursday reported a flat third-quarter profit of $1.8 billion as its booming wireless business helped offset lagging land-line telephone service.

The nation's largest phone company earned 64 cents a share, the same amount it earned in last year's third quarter. Sales rose 6% to $18.2 billion from $17.1 billion.

Verizon Vice Chairman Lawrence Babbio said the company wanted to sell 14 million local phone lines to raise funds for investing in such fast-growth areas as its Verizon Wireless cellular phone company and in DSL, or digital subscriber line, service.

Babbio wouldn't say more about possible sales, but a Verizon spokesman said it was unlikely that the firm would shed its prized Southern California network of beach communities. Verizon has about 4.5 million access lines in California.

The company already is selling 700,000 lines in Hawaii for $1.65 billion, but it hasn't been able to find a buyer for 2 million lines in upstate New York.

Like other major network owners, its conventional phone service continues to suffer as customers remove second lines in favor of DSL, turn to Internet calling or cut wires altogether in favor of wireless. The land-line business saw income drop 9% to $642 million.

As in past quarters, the company's 55%-owned Verizon Wireless was the brightest star. The cellular operation added a record 1.7 million customers, bringing its total cellphone subscriptions to 42.1 million, and boosted income 59% to $478 million, after paying a 45% dividend to minority owner Vodafone Group of Britain.

Verizon also added 309,000 DSL subscribers and 525,000 long-distance customers during the quarter, aided by Federal Communications Commission rulings that are largely turning control of networks back to the owners.

Verizon shares fell 2 cents to $39.38 on the New York Stock Exchange.

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