Verizon’s Income Rises 15.5% as Sales Climb

Verizon reported on Thursday that its net income in the third quarter rose 15.5 percent, to $1.59 billion, from a year ago. The company said revenue climbed 3.9 percent to $29 billion, in line with a survey of analysts’ expectations by FactSet.

Lowell C. McAdam, Verizon’s chairman and chief executive, said the company remained “solidly on track to meet our financial objectives for the year.”

The company, which is based in New York, said its Verizon Wireless business, a joint venture with Vodafone of Britain, had a record profit, partly because of strong sales of smartphones. It sold 6.8 million smartphones in the quarter, compared with 5.6 million a year ago.

Its shared data plans, which allow customers to pay for a single pool of data and share it across multiple smartphones, tablets and laptops, have also been popular, Verizon said. Analysts have found that these types of plans can be beneficial for higher-income families with multiple devices, but more expensive for people who have an individual plan. As a result, Verizon’s revenue per account grew to $145.42 a month, up 6.5 percent.

Verizon’s shared data plans are its response to an industrywide trend in the American wireless business: subscriber growth is slowing, because many people who want a cellphone already own one. Carriers, therefore, are relying on generating more money from each customer, and from what customers use most: wireless data to send e-mail, browse the Web and stream video.

Another factor helping Verizon make more money from each customer is its faster fourth-generation Long Term Evolution, or LTE, network.

Customers who still have the company’s old unlimited data plans, and are using a smartphone on the older third-generation network, must give up those plans if they choose to upgrade to phones compatible with the newer network.

Verizon says that, over time, it expects customers with shared data plans using the faster LTE network to want to pay for increasing amounts of data.

“It is going to be more important that people will start to upgrade in their tiers as they start to really realize the benefits of the LTE networks,” said Fran Shammo, Verizon’s chief financial officer, at the J.P. Morgan Global Technology, Media and Telecom Conference in Boston in May. “Over the future time, as they add more devices, they are going to have to buy up into tiers. So again, you will see the revenue increase there.”

Verizon Wireless said its 4G LTE network was helping it attract customers. With LTE service in 419 cities, it is leading the race to build out faster networks; AT&T, the second-biggest American carrier, is in a distant second place, with LTE service in 77 cities.

The wireless division added 1.5 million contract subscribers, its most valuable type of customer, in the third quarter, bringing the total number of subscribers on contracts to 34.8 million.

That is good news for Verizon, but the overall slowdown of customer growth in the wireless industry is still evident: subscriber growth in the overall American wireless market was only 1 percent in the quarter, said Craig Moffett, an analyst with Sanford C. Bernstein.

“Unless one believes that industry growth rates accelerated — and we certainly don’t — Verizon’s gain is AT&T’s, Sprint’s, and T-Mobile’s loss,” Mr. Moffett said in a research note.

AT&T also has adopted shared data plans, but not every carrier is taking that route. In their efforts to lure customers, T-Mobile USA and Sprint offer unlimited data plans, as Tim Horan, an analyst with Oppenheimer & Company, noted during the earnings call. But Mr. Shammo said Verizon was confident that its bigger, more reliable LTE network would keep its customers loyal.

“I think our network and our competitive advantage speaks for itself,” he said. “And I think the superiority of our network, I think, what you’re seeing is that we are competing in that arena today against the unlimited plans.”