Ina Fried

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Verizon Posts Big Loss, Adds Two Million Wireless Connections

Verizon notched a notable gain in wireless customers during the fourth quarter, though big charges marred the company’s overall earnings number.


The company saw charges from both pension items and Hurricane Sandy, resulting in a total quarterly loss of $1.48 per share for the fourth quarter. Total quarterly revenue was $30 billion, up 5.7 percent from a year earlier. Wireless revenue was $20 billion, up nearly 10 percent from a year earlier. (Correction: An earlier version of this story originally listed the wireless revenue figure as if it were the companywide figure.)

Verizon’s base of wireless subscribers, though, grew significantly in the quarter, as the company added a record 2.1 million postpaid devices. Meanwhile, some 9 percent of its existing contract base upgraded their devices during the quarter.

Verizon’s FiOS high-speed TV and Internet service also saw gains, adding more customers in the fourth quarter than it had for the prior two quarters.

“Verizon seized growth opportunities in the fourth quarter to cap a year of solid progress across the entire business,” Verizon Communications CEO Lowell McAdam said in a statement.

Verizon is set to discuss its results on a conference call at 5:30 am PT.

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Update, 5:40 am PT:: On a conference call with investors, CFO Fran Shammo said that wireless remained one of the company’s key growth areas based on the bet the company made five years ago on building a 4G LTE network, and more recently, toward its shared-data plans.

“These actions have resulted in consistent sequential growth,” Shammo said, adding that wireless revenue now represents nearly two-thirds of overall company sales.

The company activated 9.8 million smartphones in the fourth quarter, including 6.2 million iPhones, with most of the rest being Android devices. Tablet sales doubled as compared to the prior quarter, Shammo said.

The company is no longer adding capacity to its older 3G network, and all future smartphones will be 4G LTE capable, Shammo said.

As for the company’s shared-data plans, Shammo said nearly a quarter of accounts (23 percent) are on a “Share Everything” plan, ahead of the company’s expectations.

5:50 am PT:: On the wired side of things, Shammo said Verizon didn’t see the hoped-for increase in profitability in the second half of the year, in part due to Hurricane Sandy’s impact.

Verizon did say that its FiOS service now represents more than two-thirds of consumer revenue, and with 5.4 million Internet subscribers and 4.7 million FiOS TV users, is up 134,000 from the prior quarter.

The company hopes to move another 300,000 customers from copper to fiber connections this year, Shammo said.

Verizon shares are down slightly ahead of the market’s official opening on Tuesday, changing hands recently at $41.99, off 51 cents, or 1.2 percent.

6:21 am PT: Increased competition among mobile platforms should lead to lower subsidies, Shammo said.

Asked about the BlackBerry 10 launch, Shammo said he doesn’t see any unusual impact to Verizon’s finances.

“This is just yet another platform,” Shammo said, adding that the company still has a lot of loyal BlackBerry customers. “We are hoping that the platform is successful.”

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik