What were the main drivers of revenue growth in the second quarter of 2003?

The slight increase in consolidated operating revenues was primarily driven by strong performance in the Domestic Wireless segment, which saw a 14.3% revenue increase due to subscriber growth and higher average revenue per subscriber. Information Services also contributed with a 12.1% revenue increase, partly due to an accounting change.

How did the company's profitability change compared to the previous year?

Verizon reported a significant turnaround in profitability. Net income was $338 million for the quarter and $2.74 billion for the six months, compared to net losses of $2.12 billion and $2.62 billion respectively in the same periods of 2002. This improvement was significantly influenced by the reversal of large investment impairments from the prior year and a gain from adopting new accounting standards.

What are the major one-time items impacting the financial results?

Several significant one-time items affected the results. These include a $957 million pretax loss from the sale of its stake in Iusacell, a $2.7 billion charge (after-tax) related to a directory accounting change, and a $2.15 billion after-tax gain from the adoption of SFAS No. 143. Additionally, there were various special charges related to severance and pension benefits.

What is the outlook for capital expenditures?

Verizon expects total capital expenditures for 2003 to be approximately $12.5 billion to $13.5 billion, with a continued focus on investing in high-growth areas like its Domestic Wireless business.

VZ 10-Q Quarterly Report Q2 FY2003 — Revenue, Net Income, EPS

Summary

Verizon Communications Inc. (VZ) reported mixed financial results for the quarter and six months ended June 30, 2003. While consolidated operating revenues saw a slight increase of 0.5% to $16.8 billion for the quarter and 0.9% to $33.3 billion for the six months, driven primarily by strong growth in the Domestic Wireless segment, profitability was impacted by significant one-time charges and accounting adjustments. The company reported a net income of $338 million for the quarter, a substantial improvement from a net loss of $2.1 billion in the prior year, largely due to the reversal of large investment impairments recorded in 2002 and a significant gain from the adoption of SFAS No. 143. For the six-month period, net income was $2.74 billion, a turnaround from a net loss of $2.62 billion in the prior year. However, the reported income included a $957 million pretax loss from the sale of its Iusacell stake and a $2.7 billion charge related to a directory accounting change. Excluding these items and other special charges, the company demonstrated operational resilience, particularly in its wireless business.

Key Highlights

1Consolidated operating revenues increased slightly to $16.8 billion for Q2 2003 and $33.3 billion for the first six months of 2003.
2Domestic Wireless segment revenue grew significantly by 14.3% in the quarter and 14.6% year-to-date, driven by subscriber growth and increased average revenue per subscriber.
3Net income turned positive to $338 million for Q2 2003 and $2.74 billion for the six months, a significant improvement from net losses in the prior year.
4The company recognized a substantial gain of $2.15 billion after-tax from the adoption of SFAS No. 143 (Asset Retirement Obligations).
5A pretax loss of $957 million was recorded related to the sale of Verizon's interest in Grupo Iusacell S.A. de C.V.
6A significant one-time charge of $1.65 billion after-tax was recorded due to a change in accounting for the directory business (amortization method).
7Total operating expenses remained relatively stable, increasing only by 0.2% for both the quarter and six-month periods, despite increased cost of services and sales.

VERIZON COMMUNICATIONS INC Quarterly Report for Q2 Ended Jun 30, 2003

Summary

Key Highlights

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