Verizon sells 2.2 million iPhones

iphone_verizon.top.jpg By David Goldman, staff writer


NEW YORK (CNNMoney) -- Verizon announced Thursday that it activated 2.2 million iPhones during the quarter, helping the company more than triple its profit from a year ago.

The wireless division of telecom giant began selling the iPhone on Feb. 10. Verizon only sold the iPhone 4 for 50 days during the quarter, compared to the full 90 days of the quarter that Apple's (AAPL, Fortune 500) smartphone sold on rival AT&T's network.

But Verizon (VZ, Fortune 500) was on pace to sell 4 million iPhones over a 90 day period, compared to the 3.6 million that AT&T sold during the quarter.

Verizon said it added 906,000 customers under contract during the quarter. By contrast, AT&T (T, Fortune 500) added just 62,000.

Some analysts said that suggests Verizon is attracting subscribers thanks to the new iPhone, while AT&T is mainly selling iPhones to its existing customers who are due for an upgrade to a new handset.

"There was an influx of customers wanting the iPhone on Verizon, some of whom were existing customers but many of whom switched," said Todd Day, wireless industry analyst at Frost & Sullivan.

Despite drastic improvements to its network, AT&T has suffered from widely publicized complaints about its 3G service in New York and San Francisco, and it recently ranked worst in a Consumer Reports survey of U.S. wireless carriers. Some studies suggested that about 2.5 million AT&T customers would defect to Verizon once AT&T lost its iPhone exclusivity.

The iPhone will continue to be a heated battleground for the two wireless giants: Apple announced Wednesday that its iconic smartphone is still gaining steam. The device maker sold a record 18.65 million iPhones in the quarter, up 113% from last year.

Both Verizon and AT&T have fought bitterly over smartphone, tablet and mobile broadband customers, since they're one of the fastest growing sources of revenue for telecom companies. The two companies both reported more than $5 billion in wireless data revenue, up $1 billion from a year ago.

Verizon is strongly pushing its new, faster, 4G-LTE network. The company said it has activated 260,000 HTC ThunderBolts, Verizon's first LTE phone, since it went on sale March 17. Those strong sales came despite the phone's premium price of $250.

Overall, Verizon reported earnings of $1.4 billion on revenue of $27 billion for the quarter. Profit grew more than three-fold from the $443 million the telecom company earned during the same period last year.

Verizon earned 51 cents per share, a penny higher than the median estimate of analysts surveyed by Thomson Reuters. Shares fell 2% in morning trading.

AT&T reported similar figures on Wednesday, saying its profit rose 39% to $3.4 billion on revenue of $31.2 billion.

Sprint Nextel (S, Fortune 500), the next biggest wireless competitor, is expected to have revenue of just $8 billion in the quarter. Sprint will announce its quarterly profit and sales figures on April 28.

AT&T is in the midst of seeking approval for its acquisition of T-Mobile, which would make it the largest wireless provider by far -- 30% bigger than Verizon and more than three times the size of Sprint. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,817.90 7.84 0.04%
Nasdaq 4,754.89 41.92 0.89%
S&P 500 2,069.41 5.91 0.29%
Treasuries 2.31 -0.00 -0.22%
Data as of 7:41pm ET
Company Price Change % Change
Bank of America Corp... 17.18 0.06 0.35%
Apple Inc 118.62 2.16 1.85%
AT&T Inc 34.70 -0.58 -1.64%
Microsoft Corp 47.59 -0.39 -0.81%
Intel Corp 36.25 0.66 1.85%
Data as of 4:01pm ET

Sections

The Clydesdale horses, with their signature white feathered legs, have been featured in Budweiser ads for decades. More

Russia's finance minister warned Monday that his country is losing up to $140 billion per year because of falling oil prices and sanctions with Western nations. More

Drone regulation is coming to the United States, and the rules might be too severe for everyday businesses. More

Obama doesn't have the authority to create a startup visa, but part of his reform announcement could include a workaround for entrepreneurs: 'parole status.' More

Ever since the Ebola epidemic erupted in her hometown of Foya, Liberia, Deboriah Foko has been working with Doctors Without Borders to inform others about this deadly virus. Here are journal entries from a day in her life. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.