Verizon Communications on Thursday reported a healthy profit, driven primarily by its wireless business, which brought in millions of smartphone sales and a mountain of money from subscribers that just keeps growing.
For Verizon, the top American phone carrier, prolonged success is good news in the telecommunications industry, a business that is adding customers more slowly now because most people who want a cellphone already have one.
Investors in the company are probably especially happy that even though Verizon has gradually raised prices of phone plans while eliminating unlimited data over the last few years, customers have been willing to spend more on their monthly bills.
"It's just amazing that the average revenue per account keeps growing," said Tero Kuittinen, a telecom analyst at Alekstra, a mobile diagnostics firm. He said it was impressive that Verizon continued to squeeze more money from each customer, because its newest subscribers were "low-quality" customers -- budget-conscious people who held out for many years on buying smartphones.
In its earnings call, Verizon said net income in the first quarter rose 15.8 percent to $1.95 billion, or 68 cents a share, from the same quarter a year earlier, while revenue climbed 4.2 percent to $29.4 billion.
The company, based in New York, said its wireless business earned significant revenue because of strong sales of smartphones, as well as the popularity of its shared-data subscription plans, which are more expensive for individuals but can be cost-effective for families with multiple devices.
Total revenue for wireless was $19.5 billion, up 6.8 percent from last year. The company activated 7.2 million smartphones over the quarter, and its shared-data plans helped increase revenue per account to $150.27 a month, up 6.9 percent from last year. Four million of the smartphones sold were Apple's iPhones.
Verizon also continues to expand its customer base, while its competitors have experienced a slowdown in subscriber additions. It added 677,000 contract subscribers, the most valuable type of customer, up 35 percent from last year.
"Through solid execution of our strategy, the wireless results speak for themselves," Francis J. Shammo, chief financial officer of Verizon, said on the earnings call.
This article originally appeared in The New York Times.