Analysts polled by Thomson Reuters had been expecting earnings of 59 cents on revenue of $27.17 billion at Verizon (VZ). Excluding one-time costs, the company reported a profit of 60 cents a share on revenue of $27.3 billion. That’s a 10 percent decline year-over-year, but still better than expected. (See chart below; click to enlarge.)

Wireless subscription gains, though they trailed AT&T’s (T) iPhone-bolstered numbers, were impressive nonetheless. Verizon added 1.2 million wireless customers during the quarter, raising its total count to 89 million. That’s not the two million AT&T added, but it certainly demonstrates that the absence of the Apple (AAPL) iPhone from Verizon’s handset lineup isn’t holding the carrier back all that much.

Verizon also added 198,000 net new customers for FiOS Internet and 191,000 for FiOS TV service.

“Verizon continues to generate strong cash flow, which we have used in building the foundation for sustainable, long-term shareowner value,” Verizon CEO Ivan Seidenberg said in a statement. “Even through the worst of the recession, we have continued to raise our dividend and to add new customers, expand markets and grow revenues based on the power and innovation of Verizon’s wireless, broadband and global networks.”

Verizon (VZ) reported net income of $3.21 billion. Adjusted for one-time items, the company earned 63 cents a share. Analysts had expected 59 cents a share. It added 1.3 million new wireless customers, that number bolstered by the purchase of Alltel, and ended the quarter with 86.6 million mobile subscribers. Verizon’s FiOS fiber network is also doing quite well. It added 299,000 new subscribers, pushing the total to 2.2 million. (Click on graph below to enlarge.)

Quite a performance given the current economic climate.

And what of those rumors of an iPhone deal with Apple (AAPL)? During a conference call to discuss earnings, Verizon COO Denny Strigl declined comment but didn’t rule such a deal out: “We’re always open to discussions with any supplier,” he said, adding, “We have no announcements to make relative to Apple today. Historically we haven’t been dependent on any one device. We’ve been well-positioned with high-value customers.”

Translation: Do we look like a company in need of a Jesus phone?

No. I guess not.

With 1.6 million iPhones sold in its first quarter and 40 percent of those activated during that time new to its network, AT&T (T) sure does, though. Zing….

Great news for Vonage (VG), which has been tormented by a barrage of costly legal battles and set upon by new and powerful rivals. The company’s net loss shrank to $8.96 million, or 6 cents a share, from a loss of $72.3 million, or 47 cents, in the year-earlier quarter.

Sadly for Vonage, the company’s Q1 loss isn’t the only thing that shrank. Subscriber growth did as well. The company signed up just 30,000 new subscribers in the quarter, a big decline from a year earlier when it added nearly 166,000 subscribers. Worse, turnover rate increased to 3.3% from 3% in the fourth quarter.

Still, Vonage is a bit healthier than it’s been for some time now. So while it may not exactly be on the road to recovery, it’s at least crawling in its general direction. To that end, the company’s inked a deal to resell Covad’s DSL service under the Vonage Broadband name. An interesting idea, in that it will allow Vonage to bundle a broadband offering with its Internet telephony services like most other phone and cable companies on the planet. But DSL? Really? At a time when Verizon (VZ) is expanding its FiOS fiber-optic service and Comcast (CMCSA) is boosting the speed of its high-tier cable broadband?

The company’s first-quarter earnings met Wall Street expectations today thanks to strong growth in its wireless and FIOS home fiber-optic services businesses. With a 10% increase in first-quarter profit, and revenues that rose 5.5% to $23.83 billion, Verizon’s business would appear to be more recession-proof than others. “We’re really not seeing a change in trends,” Chief Financial Officer Doreen Toben said in an interview. “How many people are really going to drop their wireless phone?”

Not very many. Verizon added 1.5 million subscribers to its mobile business during the quarter. That said, there are plenty of folks willing to drop their landlines. Verizon wire-line subscribers declined 8.2% to 40.52 million from 44.15 million in the first quarter of 2007.

Some subscribers to the company’s FiOS fiber-optic Internet service are finding themselves redirected to Verizon’s own advertising-laden search-engine page when they mistype a URL or query a nonexistent Internet site–even if Verizon’s search isn’t set as their default. Verizon says it’s only trying to help, and to be fair, it does offer subscribers–who never “opted in” in the first place– the chance to opt out by changing the DNS settings in their routers.

Still, it’s all a bit too reminiscent of VeriSign’s Site Finder, a service that hijacked people who misspelled domain names and sent them to a Web directory full of advertising. Which, given the hue and cry over Net neutrality, isn’t the sort of memory you want to be conjuring up as a major telecom provider.