NEW YORK (Reuters) - Verizon Communications Inc posted first-quarter earnings and revenue that were slightly higher than Wall Street expectations even as wireless growth slowed from the fourth quarter.
Its mobile venture, 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 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 iPhone fueled growth but also required hefty subsidies.
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. Its biggest rival AT&T Inc and Sprint Nextel, the No. 3 U.S. mobile service report quarterly results next week.
(Reporting By Sinead Carew; Editing by Gerald E. McCormick, Dave Zimmerman)