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Profits Slip for Verizon Communications

New York-based telecommunications giant Verizon Communications said this week that second quarter profits for the company fell 24 percent owing to labor and costs associated with the merger of Verizon with MCI Incorporated. The telecommunications provider also attributed the fall in profits to losing its customer share to new service providers such as cable-television company Comcast. Despite this fall in total profits, sales for Verizon rose 26 percent to $22.7 billion, boosted by the purchase of long distance provider MCI in January.

Net income for Verizon was reportedly totaled at an announced $1.61 billion, or 55 cents a share, down from $2.11 billion, or 76 cents, at the same point in 2005, when the company had a net gain of $336 million on the sale of assets. Verizon lost 1.02 million local lines in the quarter as it battled Comcast and Time Warner Inc., which offer phone services in package deals - including television and high-speed Internet access.

Shares of Verizon rose 3 cents to $33.85 in earlier trading on the New York Stock Exchange (NYSE) on Monday. Excluding the costs which came with purchasing and then merging with MCI, and the costs of building "the network" (as it is referred to in commercials) that carries Verizon`s new television service and other services to customers, profit for the telecommunications company was set at 64 cents, up from 63 cents a year earlier and more than the 62-cents estimated by analysts in a Thomson Financial survey.