Big Red in the Red
Reporting fourth-quarter earnings this morning, Verizon posted revenue that jumped 9.9 percent to $27.09 billion and said it added 2.2 million mobile subscribers. Yet the company reported a loss of $653 million, or 23 cents a share, for the quarter–mostly because of costs related to layoffs in the period.
Quite a change from the profit of $1.24 billion, or 43 cents a share, the carrier reported in the quarter a year ago.
Analysts polled by Thomson Reuters (TRI) had been expecting earnings of 54 cents a share on $27.33 billion in revenue.
Revenue from Verizon’s (VZ) wireline services declined 3.9 percent to $11.5 billion. But data revenue rose 31 percent, to $16 billion. And wireless data revenue accounted for 32 percent of all service revenue, up from 26.5 percent a year earlier.
“Today’s 4Q results were eye-opening, if only because of the magnitude of the divergence,” Bernstein analyst Craig Moffet said in a research note issued after earnings. “Amidst an aggressive campaign to reinforce their positioning as the best-in-class network, and no doubt aided by AT&T’s well-publicized network travails, Verizon Wireless pulled away, with a solid 1.15M subscriber gain in post-paid and, more surprisingly, a huge opportunistic 1.0M subscriber gain in wholesale.”
But, Moffett cautioned, “…Wireline results were at least as weak as Wireless was strong, and Wireline remains the company’s center of gravity. Notable in the Wireline results were a worsening of trends in the legacy copper business and–perhaps worse–a serious miss in the growth of their FiOS business as well….Overall, we think the results must be judged as something of a disappointment.”