Verizon Posts Slim Revenue Gains, but Net Income Loss
Verizon Communications reported revenue increases for the fourth quarter of 2009, driven by wireless and broadband growth, but the gains were slim after accounting for revenue from its January 2009 acquisition of AllTel.
But including one-time layoff costs and other charges, Verizon posted a net loss of $653 million. Not including one-time items, net income was down from $3.4 billion to $3.3 billion.
Verizon on Tuesday reported revenue of US$27.1 billion in the fourth quarter, up 9.9 percent from the fourth quarter of 2008. But on a pro forma basis -- consolidating Verizon's and AllTel's revenue for the fourth quarter of 2008 -- revenue growth was just 0.2 percent.
Verizon recorded a loss of $0.23 in diluted earnings per share, compared with $0.43 per share in the fourth quarter 2008. Included in the loss was a $3 billion [b] one-time charge related to worker reductions. Adjusted earnings per share were $0.54, compared to $0.61 in the fourth quarter of 2008.
The $0.54 earnings per share met expectations of analysts polled by Thomson Reuters.
For 2009, annual operating revenue was $107.8 billion, an increase of 10.7 percent from 2008 on a reported basis and 1.5 percent on a pro forma basis.
The quarter's numbers reflect management's efforts to strengthen Verizon, Chairman and CEO Ivan Seidenberg said in a statement. "We expect continued growth in 2010 and beyond, with a goal of delivering long-term shareowner value," he said.
Verizon has continued a process of "streamlining" its traditional wireline operations, instead focusing on its FiOS broadband and television service and other areas, he added. Revenue from traditional phone service at large telecom carriers has been dropping for several years.
"Our fourth-quarter earnings reflect costs to re-size and simplify our wireline business," Seidenberg said. "This transformation is realigning our wireline cost structure, improving productivity, and focusing resources on sales of FiOS and strategic business services."
Verizon reported 2.2 million net customer additions for its mobile service, and the company now has 91.2 million mobile customers. Wireless revenue grew by 22.5 percent from the fourth quarter of 2008.
The company also added 153,000 FiOS broadband customers and the same number of FiOS TV customers. Verizon now has 3.4 million FiOS broadband customers and 2.9 million FiOS TV customers. The company's broadband and video revenue for the fourth quarter were $1.7 billion, up 25.5 percent from the fourth quarter of 2008.