Verizon Communications (VZFree Verizon Stock Report), a telecommunications giant and Dow-30 component, has reported June-quarter earnings of $0.91 a share, on par with our estimate and a healthy 25% jump on the year-earlier result, on a strong 5.7% top-line improvement. Investors seemed somewhat satisfied, and the stock was up nominally on the news.

The company certainly looks different than it did this time last year, given the February acquisition of Vodafone's 45% indirect interest in VZ Wireless. This $130 billion deal, which provided Verizon with 100% ownership of the industry-leading wireless carrier in the United States, has certainly proven to be immediately accretive to VZ's bottom line. 

Verizon has been on quite a run of late, having now reported double-digit earnings growth in nine of the past ten quarters, and in the June interim, the company posted its strongest revenue growth in six quarters. As is usually the case, Verizon Wireless was once again the fair-haired boy. During the quarter, VZ Wireless added 1.4 million retail postpaid net subscribers, bringing Verizon's total number of retail connections to 104.6 million, up 4.5% from the year-earlier figure. 

Total Wireless revenues came in at $21.5 billion, up 7.5% year over year, with the lion's share of the good news attributable to a 4.7% uptick in retail postpaid average revenue per account (ARPA). Last year Verizon Wireless started to report ARPA instead of average revenue per user (ARPU), following the rollout of the Share Everything Plan and as customers continued to add multiple devices to their accounts. Moreover, at the end of the second quarter, smartphones comprised almost 75% of the Verizon Wireless retail postpaid customer phone base, up from 72% at the end of the first-quarter. Any improvement in this metric certainly augurs well for ARPA growth going forward, as smartphone users typically pay additional date-related fees. 

Lastly, wireless operating income margins have rebounded strongly over the last two years or so, after coming under pressure in 2012, due to the introduction of Apple's (AAPL) iPhone, which came with a rather hefty handset subsidy. Indeed, the operating margin came in at 32.5%, up a bit from the year-earlier figure.

After quite a long run of uninspiring comparisons, Verizon's Wireline division is certainly bouncing back. To wit, year-over-year quarterly revenues have now grown more than 4% in the last eight quarters. During the June period, consumer revenues came in at $3.9 billion, up 5.3% year over year, with the company's FiOS service responsible for much of the growth. Representing 75% of total consumer revenues, FiOS revenues grew 14.4% year over year, to a record $3.1 billion. Verizon added 139,000 net new FiOS Internet connections and 100,000 net new FiOS connections, bringing FiOS Internet totals to 6.3 million subscribers and FiOS Video totals to 5.4 million subscribers. Lastly, total Wireline revenues came in at $9.8 billion, up 0.3% relative to the year-earlier result. This is the first quarterly year-over-year increase in total wireline revenues in more than seven years.

All told, we remain confident in our $3.50-a-share earnings estimate for 2014, and look for a nice jump in share net for next year, as well. High-quality Verizon stock is still an excellent choice for income and total return potential.

About The Company: Verizon Communications was created by the merger of Bell Atlantic and GTE in June of 2000. It is a diversified telecom company with a network that covers a population of about 290 million and provides service to nearly 91.2 million. In the last few years, has acquired MCI (1/06) and Alltel (1/09). The company is also the largest provider of print and on-line directory information. Has a wireline presence in 28 states & Washington, D.C. and a wireless presence in every U.S. state & D.C., as well as operations in 19 countries. 

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.