Cable Technology Feature Article
January 26, 2010
Verizon Q4 Results: Operator Highlights Strengths in Wireless, But Posts Losses
By Marisa Torrieri, TMCnet Editor
Verizon (News - Alert) Communications Inc.’s wireless business seems to be kicking butt, as the company added 22 million subscribers in the fourth quarter.
But aside from wireless, the telecommunications giant is struggling a bit – and this, according to reports, can be at least partially attributed to layoff costs from its shrinking landline business.
Verizon on Tuesday reported losses of $653 million, or 23 cents per share, in the fourth quarter of 2009, compared with a profit of $1.24 billion, or 43 cents per share, in the year-ago period.
Verizon reportedly warned shareholders earlier that it paid higher-than-expected subsidies to attract customers in light of its ongoing battle for subscribers (which many believe is largely with iPhone’s (News - Alert) exclusive carrier AT&T).
As a result, Verizon shares fell 59 cents, or 1.9 percent, to $30.68 in pre-market trading.
Another reason for the low result has to do with the loss of more than 7,000 employees, between September and the end of the year, according to reports.
On the bright side, Verizon reported the influx of wireless subscribers at the end of 2009 kept Verizon Wireless in the top spot as the nation’s largest wireless provider based on total customers.
“Verizon Wireless continued to lead the industry in cost efficiency,” the company stated in its press release accompanying the quarterly report. Monthly cash expense per customer (non-GAAP) increased in the fourth quarter 2009 to $27.62 from $26.77 in the fourth quarter 2008 on a pro forma basis. For the full year, cash expense per customer was $27.49, unchanged from 2008 on a pro forma basis.
Additionally, Verizon Wireless said it continued to extend the reach of its 3G broadband network.
In December, the company updated specifications for wireless devices that will run on its LTE (News - Alert) 4G network, which ultimately will connect a full range of electronics and machines, and spur the growth of new class of services, such as online gaming, media sharing and video entertainment.
Verizon Wireless plans to launch its 4G network in 25 to 30 markets in 2010 and cover its entire current nationwide 3G footprint by the end of 2013.
Another highlight: As part of its strategic partnership with Google, Verizon Wireless introduced two Android (News - Alert)-based devices in November: the DROID by Motorola and the DROID Eris by HTC. Other 3G smartphones launched during the fourth quarter include the BlackBerry Storm2 and BlackBerry Curve 8530, both with built-in WiFi, and the Samsung (News - Alert) Omnia II powered by Windows Mobile 6.5.
Marisa Torrieri is a TMCnet Web editor, covering IP hardware and mobility, including IP phones, smartphones, fixed-mobile convergence and satellite technology. She also compiles and regularly contributes to TMCnet's gadgets and satellite e-Newsletters. To read more of Marisa's articles, please visit her columnist page.
Edited by Marisa Torrieri