UPDATE 4-Verizon profit rises, weathers economic slowdown

(Adds analyst comment, Verizon Business details)

By Ritsuko Ando

NEW YORK, April 28 (Reuters) - Verizon Communications Inc (VZ.N) reported a higher quarterly profit on Monday on stronger-than-expected growth in wireless subscribers, showing resilience in the face of a U.S. economic slowdown.

The shares in Verizon, the second-largest U.S. phone company, rose 2.2 percent after the results showed Verizon Wireless, a mobile venture with Vodafone Group Plc (VOD.L), added 1.5 million net new subscribers in the first quarter.

That exceeded the average estimate of 1.42 million additions from six analysts contacted by Reuters.

"Wireless was the star," said Craig Moffett, an analyst at Sanford C. Bernstein & Co.

He and other analysts noted, however, that Verizon's home- phone business suffered a dramatic drop as customers switched to cell phones and rival services from cable operators, similar to trends at industry leader AT&T Inc (T.N).

Verizon said first-quarter profit rose to $1.6 billion, or 57 cents a share, from $1.5 billion, or 51 cents a share, in the year-ago quarter.

Profit after adjusting for costs such as the spin-off of some wireline assets was 61 cents a share, matching the average forecast on Wall Street according to Reuters Estimates.

Revenue rose 5.5 percent to $23.8 billion, also in line with analysts' expectations.

Chief Executive Ivan Seidenberg said the results showed "Verizon has weathered the current economic uncertainty."

Lehman Brothers reiterated an "overweight" rating, calling Verizon one of its favorite large-cap telecom services shares.

"In our view, these are good results for Verizon and reflect the defensive nature of telecom in a slowing economy," analyst Thomas Seitz said in a note to clients.

Wireless revenues rose 13.2 percent to $11.7 billion, boosted by demand for advanced, data services.

Churn, the industry term for cancellations, was 1.19 percent. The rate of churn among post-paid users, or those who pay monthly fees, was 0.93 percent.

Verizon said the launch of its $99 unlimited wireless calling plan, a move that was quickly followed by AT&T and triggered concerns of a price war ahead, had not dragged down revenue as many analysts had feared.