Verizon shares up 10 percent on positive earnings

Published 11:08 pm Monday, October 27, 2008

NEW YORK — Verizon Communications Inc. said Monday earnings rose 31 percent in the third quarter as wireless did better than expected, while its traditional phone business continued to decline.

The country’s second largest telecommunications company, after AT&T Inc., earned $1.67 billion, or 59 cents per share, up from $1.27 billion, or 44 cents a share, a year ago.

Revenue rose 4.1 percent to $24.7 billion.

Excluding charges for job cuts and merger costs, Verizon earned 66 cents per share, matching the average estimate of analysts polled by Thomson Reuters. They were expecting $24.52 billion in revenue.

Chief Executive Ivan Seidenberg said business was holding up well despite the economy, but he said it would have an effect in the current quarter.

“For the Christmas season, consumer spending will be somewhat lighter, and business spending will be somewhat curtailed,” he said.

Seidenberg said the company expects to increase earnings, excluding items, by 8 percent from last year. At the beginning of the year, it had put the increase at 8 percent to 10 percent.

The new forecast indicates fourth-quarter earnings of 62 cents per share, falling below the 65 cents per share analysts are expecting.

Investors, however, found Verizon’s results reassuring, sending shares up $2.53, or 10.1 percent, to end at $27.61.

Seidenberg also said Verizon Wireless still views its planned acquisition of Alltel Corp. as attractive, even though borrowing costs will be higher than when the deal was announced this summer. There had been speculation that the company would back away from the deal because of the credit market.