Verizon posts $1.9 billion loss over pensions and Sandy-related costs

Reuters
Posted Jan. 22, 2013, at 11:26 a.m.

NEW YORK — U.S. telecommunications group Verizon Communications Inc. posted a $1.93 billion quarterly loss on pension liabilities and superstorm Sandy-related charges that took the shine off a jump in wireless business revenue.

Shares of the company fell more than 2 percent to $41.55 in trading before the bell.

Operating margin at the company’s wireless business, which accounts two-thirds of total revenue, rose slightly to 24 percent.

Verizon and other mobile services providers subsidize smartphones for new customers and as a result are facing margin pressure due to rising costs.

Wireless services revenue for the fourth quarter grew 8.5 percent to $16.4 billion, while retail service revenue jumped 8.4 percent to $15.8 billion.

Verizon Wireless, the company’s mobile venture with Vodafone Group Plc., is the biggest mobile service provider in the U.S.

Verizon Wireless said in November it would pay a total dividend of $8.5 billion to its two parent companies.

Capital spending for the year was $16.2 billion, including $135 million related to Sandy recovery efforts, and was in line with 2011 spending.

Like rivals AT&T and Sprint Nextel, Verizon is spending billions of dollars to upgrade its network to support booming demand for services like web surfing and video on smartphones.

Verizon Communications reported a loss of $1.48 per share, compared with a loss of 71 cents per share a year earlier, when it posted a loss of about $212 million.

Excluding one-time items, Verizon reported a profit of 38 cents per share.

Revenue rose 4.5 percent to $30.05 billion.

Analysts expected a profit of 50 cents per share and revenue of $29.83 billion, according to Thomson Reuters’ Institutional Brokers’ Estimate System.

http://bangordailynews.com/2013/01/22/business/verizon-posts-1-9-billion-loss-over-pensions-and-sandy-related-costs/ printed on July 26, 2014