Tablets Again Drive Verizon's Subscriber Growth

Verizon Communications Inc. said it added 1.52 million of its most lucrative long-term wireless contracts in the third quarter, again driven by a surge in tablet connections.

Verizon has relied heavily on signing up tablets as a way of keeping its subscriber numbers positive and has even given away tablets free when customers add them to their data plan.

In the latest period, postpaid tablet additions of 1.1 million more than doubled postpaid phone additions of 457,000.

Shares of Verizon, down 1.3% this year through Monday, rose 12 cents to $48.60 in premarket trading.

The company in late February completed its deal to gain full ownership of Verizon Wireless, buying Vodafone Group PLC's 45% stake in the wireless carrier for $130 billion. The acquisition is expected to sharply increase Verizon's profits this year and will give the company more flexibility in driving Verizon Wireless's future. Verizon has said it is looking to focus on smartphone penetration and connected devices, such as cars and tablets, to boost sales at Verizon Wireless.

Wireless providers are expecting to spend billions of dollars in upcoming years in government-run wireless spectrum auctions, as they seek to beef up their networks. Verizon and AT&T Inc., the two largest U.S. wireless providers, may face limits to how much spectrum they are allowed to purchase, though, as government regulators try to keep smaller providers T-Mobile US Inc. and Sprint Corp. competitive against their larger rivals.

Overall, Verizon posted a quarterly profit of $3.7 billion, or 89 cents a share, compared with $2.23 billion, or 78 cents a share, a year earlier. Excluding items in the year-ago quarter, the company had per-share earnings of 77 cents in the 2013 quarter.

Revenue rose 4.3% to $31.59 billion.

Wall Street analysts on average expected a profit of 90 cents a share and revenue of $31.58 billion, according to Thomson Reuters.

Write to Erin McCarthy at [e-mail]

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