Riding strong results from Verizon Wireless and a record quarter in broadband, Verizon today posted a 4% increase in third-quarter profits.

Like other local phone companies, Verizon has seen its access lines continue to shrink, and its share price fall, but the service provider “is adding customer connections faster than we are losing access lines,” said CFO Doreen Toben. In addition, it posted a 4.6% growth in average revenue per user on the consumer wireline side of its business, she said.

Verizon earned $1.87 billion, or 67 cents per share, compared with $1.80 billion, or 64 cents per share, a year earlier. While the company added 389,000 high-speed Internet lines, total phone lines were down 6.2% to 49.7 million from the same period a year earlier.

“The loss of traditional lines is not entirely due to competition,” Toben said. “Users are migrating from switched access lines to wireless and broadband. We pick up more than our share of these customers. The total market for communications services is growing, and we are clearly participating in that growth.”

The broadband growth includes faster uptake in DSL following a price decrease to $14.95 for the entry tier this summer, as well as Verizon’s ambitious FiOS fiber-to-the-home buildout, which will pass 2 million homes this year and 3 million next year.

Verizon Chairman Ivan Seidenberg conceded his company’s stock performance has lagged the industry and the economy--Verizon’s shares have fallen 24% this year, among the worst performances in the Dow component stocks.

“We feel bad that the stock has drifted down as low as it did,” he told analysts at the conclusion of a conference call. “Hopefully the strong quarter and the visibility of our programs will make people somewhat more comfortable about what the program is as we go out into '06 and '07.”

Seidenberg said Verizon would consider a stock buy-back since the company is generating enough cash flow to easily cover expenses and dividend payments.