Verizon Communications (VZ) Sees Strong Wireless Growth in Q3

Verizon Communications (NYSE: VZ) continues to see strong adoption of 4G smartphones and tablets in third-quarter 2014, according to comments made today by Chairman and CEO Lowell McAdam at an investor conference here.

McAdam said that retail postpaid net additions are more than 40 percent higher in the quarter-to-date than a year ago. In third-quarter 2013, Verizon reported 927,000 retail postpaid net additions. The percentage of customers choosing the Verizon Edge early-upgrade plan so far in third-quarter 2014 is similar to the rate in first-quarter 2014, which was approximately 12 percent of total phone activations.

Verizon expects strong customer growth and low Edge adoption rate this quarter to date to put some pressure on the wireless segment EBITDA service margin (non-GAAP) on a sequential basis. In second-quarter 2014, Verizon reported a wireless segment EBITDA service margin of 50.3 percent.

In wireline, FiOS continues to drive consumer revenue growth, while enterprise and wholesale growth remain under pressure. Although Verizon has made progress in expanding the wireline segment EBITDA margin (non-GAAP) in the first half of 2014, the company expects some quarter-to-quarter fluctuations due to seasonality and the timing of non-recurring billings and costs. Verizon reiterated that the company remains on track to achieve full-year expansion of the wireline segment EBITDA margin.

Verizon will report third-quarter 2014 results on Tuesday, Oct. 21.

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