Verizon Communications Inc
While wireless customer growth slowed, Chief Financial Officer Fran Shammo said the company's mobile venture, Verizon Wireless, saw the fastest growth in mobile service revenue in three years as more customers used smartphones.
Shammo said the growth should continue as the company plans to offer new shared data service plans this summer under which customers will be able to connect more than one device under a single data service plan.
We're confident we'll continue to accelerate our growth in this area, Shammo told analysts on a conference call.
Verizon Wireless average monthly revenue per user (ARPU) for contract customers rose 3.6 percent in the quarter to $55.43 while data service revenue grew 16 percent to $23.80.
Verizon Wireless added 501,000 contract customers in the quarter, roughly in line with the average expectation for just over 511,000 from five analysts polled by Reuters but down from fourth quarter additions of 1.2 million.
Verizon shares rose 1.4 percent in premarket trade to $38.19 after closing at $37.66 on New York Stock Exchange Wednesday.
Given that Verizon, the first of the big U.S. operators to report first quarter results, typically posts the strongest customer growth of its peers, its sluggish growth may foretell a sharp slowdown in growth across the industry.
People were upgrading but there doesn't seem to be as many new people coming in to wireless, said Piper Jaffray analyst Christopher Larsen, adding that Verizon's mobile growth was in line with his recently lowered estimate.
However, Larsen was impressed with the company's financials.
It looks like it was a good quarter over all. Earnings per share was slightly ahead of the Street. Revenue was a little bit better, Larsen said.
The slower customer growth also comes with a silver lining as the Verizon Wireless profit margin rose to 46.3 percent from 42.2 percent in the fourth quarter, when an Apple Inc
The company said that it sold 3.2 million iPhones in the quarter
Verizon earnings rose to $1.69 billion, or 59 cents per share compared with Wall Street expectations for 58 cents per share according to Thomson Reuters I/B/E/S. In the year-ago quarter it reported a profit of $1.44 billion, or 51 cents per share.
Revenue rose to $28.24 billion from $26.99 billion and compared with analyst expectations for $28.17 billion.
Verizon Wireless is a venture of Verizon and Vodafone Group Plc
(Reporting By Sinead Carew; Editing by Gerald E. McCormick, Dave Zimmerman)