NEW YORK - Verizon Communications on Monday reported steady earnings in a stormy economy.
The country’s second-largest telecommunications company said first-quarter earnings rose 9.8 percent as its wireless division signed up more new customers than rival carriers did.
Verizon earned $1.64 billion, or 57 cents per share, in the quarter that ended March 31, compared with $1.5 billion, or 51 cents per share, a year ago.
Revenue rose 5.5 percent to $23.8 billion from $22.6 billion.
Excluding one-time items, earnings were 61 cents per share, matching expectations of analysts polled by Thomson Financial. Revenue fell slightly short of analyst expectations of $23.86 billion in revenue.
“Verizon has weathered the current economic uncertainty with strong first-quarter results,” said Chairman and CEO Ivan Seidenberg.
Analysts have been looking to telecommunications companies to hold up well, even as the economy slows — which AT&T, Verizon’s largest rival, did with an earnings report last week that showed little sign of trouble.
Stifel Nicolaus analyst Christopher King upgraded Verizon to “buy” from “hold” after the report, noting the stock’s 4.6 percent dividend yield and growth prospects in wireless and fiber-optic services.
Shares rose 91 cents, or 2.5 percent, to close at $37.95 Monday.
On a conference call Monday, Verizon’s chief financial officer, Doreen Toben, said bad customer debt on the landline side had actually improved from last year, while wireless accounts had stabilized.
UBS analyst John Hodulik said wireless results where strong, while the landline business was somewhat lower than expected.
Verizon Wireless added 1.5 million subscribers, beating AT&T, which added 1.3 million in the quarter. However, its growth fell from 1.7 million in the same quarter last year. Verizon Wireless still trails AT&T in the total number of subscribers, at 67.2 million compared with 71.4 million.
Verizon Wireless started a minor price war for high-end cellular plans in February by introducing a $99.99 monthly plan with unlimited calls and no roaming fees. Other carriers quickly matched or undersold that plan, and stocks took a hit across the industry as investors feared for carrier margins.
But Verizon Chief Operating Officer Denny Strigl said Monday that the plan was boosting results.
Before the plan was introduced, 4 percent of new subscribers opted for plans that cost $99 or more. With the new plan, 13 percent were buying the $99 plan, he said. AT&T reported a similar outcome.
In March, Verizon Wireless spent $9.36 billion in a government spectrum auction for airwaves it plans to use to expand its data services in 2009, once the airwaves are available.
Verizon lost 8.2 percent of its landlines from last year, ending with 40.5 million. Broadband connections were up 14.9 percent to 8.5 million, but total operating revenue in the segment, which includes business services, declined 1.4 percent to $12.3 billion.
The company added a net of just 4,000 DSL subscribers, as customers moved to fiber-optic FiOS Internet service. That service added 262,000 subscribers.
Verizon added 263,000 customers to its FiOS TV service in the quarter, for a total of 1.2 million. The service is Verizon’s way of tackling the threat from cable companies that are siphoning off voice customers.
For the first time, the company divulged the average price FiOS customers are paying per month: $129.
It is preparing to raise prices for some of its premium video packages later this quarter as it adds more high-definition channels.
Strigl said the company now has a sufficient supply of high-definition set-top boxes, after periodically running out of them late last year and early this year.
Verizon cut its landline work force by 6,500 people last year to match shrinking operations.
“We expect this trend to continue with ongoing reductions through the year,” said Toben, the chief financial officer.
Verizon is also trimming the edges of its local-phone service territory.