V Team,

Today we announced our third-quarter financial results, reporting 3.9 percent revenue growth and our third consecutive quarter of double-digit earnings growth. We are growing in all our strategic areas, particularly in wireless, and we have generated 50 percent more cash flow year-to-date than last year. This overall strong performance puts us on track to meet our financial objectives for the year.

Wireless. Wireless had an excellent quarter of growth and profitability. Service revenue rose by 7.5 percent and margins were a record-setting 50 percent. Fueled by our leadership in 4G LTE, our new “Share Everything” plans and customers’ growing appetite for smartphones and tablets, we continue to take share from our competitors, winning 1.8 million retail net customers in the quarter – the highest in four years. We need to continue to build on this excellent momentum in the holiday selling season and move as many customers as possible to the faster, more efficient 4G LTE platform.

Wireline. Total wireline revenues declined by 2.3 percent. Although consumer revenues grew 4.6 percent — the fastest in many years — Verizon Enterprise Solutions revenues were down 3.6 percent, reflecting the continuing challenges of the global economy. Margins were down year-over-year, and we are not seeing the second-half improvement in profitability that we had expected going into 2012. We are attacking the growth and margin issues in a number of ways.

• VES is focusing on growing strategic services, which increased 4.4 percent in the quarter.

• We expect to accelerate FiOS penetration in fourth quarter and into 2013.
• Both organizations are focused on process improvement and simplifying their product portfolios utilizing our VLSS framework in order to reduce our cost structure and improve our performance in the eyes of the customer.
• Our new union contract, which we hope will be ratified shortly, will improve the wireline cost structure while providing secure jobs and great benefits to all employees.

Corporate. Good management of our capital budget contributed to our excellent cash flows in the quarter. Corporate groups remain focused on process improvement and efficiency through such efforts as the restructuring of the finance department and the rationalization of systems by IT. We’re starting to see some early results from VLSS, with the big fundamental improvements still to come.

We began the year with the theme, “Change Energizes Us.” In the course of 2012, we have seen significant change across all parts of our business:

• From the purchase of new spectrum, the launch of our partnership with cable, and new products and price plans in wireless,
• To the introduction of FiOS Quantum and the soon-to-be-launched Red Box video product in Consumer & Mass Business,
• To the Hughes acquisition and expansion into such fields as health care and energy in VES,
• To our continued investment in strategic technologies like LTE,
• To the ongoing VLSS and process improvements being driven by thousands of employee initiatives all across the business.

Now our challenge is to capitalize on all these change initiatives and maintain our strong momentum in the fourth quarter and into 2013.

I hope you’ll join me, Fran Shammo and the rest of Verizon’s business leaders on our quarterly webcast tomorrow to discuss what we need to do to ensure a strong finish to the year.

News:

Wireless boosts Verizon’s third-quarter profit, mum on 2013

Verizon Quarterly Results Show Double-Digit Growth, 4G LTE Focus