An earlier version of this story improperly cited Ivan Seidenberg. The comments should have been attributed to John Killian.
Verizon Chief Financial Officer John Killian tried to cast a positive light on the company’s slumping net adds by pointing out growth potential in the emerging device space.
The company says it now has 7.3 million nontraditional devices running on its network, from consumer electronics to patient monitoring gadgets. Verizon Wireless’ total subscriber base stands at 92.8 million customers.
“There’s plenty of upside in terms of data penetration,” he said. “The proliferation of [emerging] devices will be another source of incremental wireless growth.”
Killian admitted that the increased saturation of the U.S. market was beginning to effect the operator’s net adds but said the company would fight to maintain its profitability.
“We can do better from a postpaid perspective than we did in the first quarter,” he said. “We’re not ready to throw the towel in to say postpaid growth is going to be substantially lower.”
Though first quarter net adds are usually 20 percent to 30 percent lower than those in the fourth quarter because of the holiday season, the drop was especially pronounced this year.
Verizon added just 1.55 million customers in the first quarter compared to 2.23 million last quarter. Verizon did not have any significant device launches in the first quarter and Seidenberg said the drop was partially attributable to the popularity of the Motorola Droid, which boosted the operator’s fourth quarter sales.
Verizon’s postpaid ARPU hit $52.61 on increases in data revenue, which hit $4.6 billion. Total customer churn improved from last year to stand at 1.4 percent.
Verizon took a major hit from lower tax benefits resulting from the recently-passed health care bill. Charges related to the bill took 34 cents per share out of its earnings while pension settlement losses, Alltel-related costs and its wireline spinoffs brought the total damage to 42 cents per share. Overall, Verizon took a $962 million charge on non-operational items.
Overall, Verizon made $2.28 billion, or 14 cents per share, down from $3.2 billion, or 58 cents per share, last year. Net income attributable to Verizon was $400 million in the first quarter of 2010, compared with $1.6 billion in the first quarter of 2009.