Verizon Communications Inc posted a lower quarterly profit on Monday as weakness in its wholesale and corporate activities offset strength in its consumer wireless business.
Verizon shares slipped 1 percent in pre-market trading after the release of the results, which were largely in line with Wall Street expectations.
Verizon said that while revenue increased 0.2 percent in its mass-market landline segment, including home phones and small businesses, that was offset by declines in the wholesale and enterprise business, which was hurt by layoffs.
Revenue in the second quarter rose to $26.86 billion from $24.1 billion, and compared with the average analyst estimate of $26.846 billion, according to Reuters Estimates.
It's slightly better than we expected but not a standout quarter by any means, said Hudson Square Research analyst Todd Rethemeier.
Subscriber growth at Verizon Wireless and its biggest rival AT&T Inc probably means that customers switched from smaller rivals such as Sprint Nextel Corp and T-Mobile USA, owned by Deutsche Telekom , Rethemeier said.
It's reassuring that both Verizon and AT&T had good postpaid subscriber growth but it's somewhat worrisome for Sprint and possibly T-Mobile USA, who have yet to report, he said.
Verizon's second-quarter profit fell to $3.16 billion, or 52 cents per share, from $3.4 billion, or 66 cents a share, in the same quarter a year earlier.
Excluding items such as merger integration and pension charges, profit was 63 cents per share, in line with analysts' average estimates, according to Reuters Estimates.
On Friday, Verizon, the biggest U.S. mobile service, said it added 1.1 million wireless subscribers in the quarter.
AT&T Inc said last week that it added 1.4 million net new customers.
Verizon, which owns Verizon Wireless with Vodafone Group Plc , said that before merger costs and other items, wireless margins on earnings before interest tax, depreciation and amortization rose 0.7 percent to 46.3 percent.
In comparison AT&T margins were hurt by hefty costs from subsidies for Apple Inc's iPhone.
Verizon shares fell to $31.15 in pre-market trade after closing at $31.50 on Friday.
(Reporting by Sinead Carew; Editing by Derek Caney and Ted Kerr)