CFO Fran Shammo had little to say to analysts this morning about Verizon's planned video streaming service with Redbox, aside from the fact that it's 'very close to launching' this quarter and should improve his company's profits next year. Still, Verizon investors seem content with the company's direction after it delivered solid Q3 results. The share price is up 1.4% in early trading after Verizon reported net income of $4.3B, +21.2% vs the same period last year, on revenues of $29B, +3.9%. The revenue figure exactly matched Wall Street's consensus forecast. So did earnings per share, which came in at 64 cents not including charges tied to its payments to TiVo to settle its patent infringement case against the communications giant. The FiOS video business continued to slow: Subscriptions rose just 2.7% vs Q2 to 4.6M. The increase of 119,000 customers fell short of Wall Street's expectation for 142,000. The company's FiOS broadband unit also missed analyst targets. It ended up with nearly 5.3M customers, +136,000 vs the consensus forecast of +165,000. 'The read-across for cable and satellite incumbents is self-evidently positive; lower growth for FiOS means smaller losses for their competitors,' Bernstein Research's Craig Moffett says.
The wireless unit was helped by the fact that it only had one week of sales in the quarter of Apple's new iPhone 5. (Remember that phone companies pay upfront to subsidize most handsets, and recoup the cash from the subscriber's monthly service payments.) Also, Verizon announced that it struck a deal to offload about $7.5B of its pension fund obligations to Prudential Insurance Co. Despite the turbulence in the wireless market following Softbank's effort to bolster Sprint, 'we remain solidly on track to meet our financial objectives for the year,' CEO Lowell McAdam says.
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