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Verizon (VZ) Q4 Loss Widens On Charges

 January 22, 2013 06:55 AM

(By Balachander S) Verizon Communications Inc. (NYSE: VZ) reported a wider quarterly loss hit by non-operational charges while posting strong customer and revenue growth in its Wireless and FiOS services.

On an adjusted basis, earnings per share (EPS) declined 27 percent to 38 cents, missing market expectations of 50 cents.

Net loss was $1.93 billion or $1.48 a share for the fourth quarter, compared with a loss of $212 million or 71 cents per share in the year-ago quarter. Fourth-quarter of 2012 included charges of $1.86 per share related to pension obligations, debt-restructuring costs and Superstorm Sandy-relayed costs.

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Operating revenue rose 5.7 percent to $30.04 billion, surrounding Wall Street projections. Verizon Wireless revenue grew 9.5 percent.

Verizon earnings have managed to top Street view only once in the past four quarters, and the consensus estimate declined from 60 cents three-months ago. In the past one month, 12 analysts have cut their earnings view on Verizon.

  "Verizon Wireless reported record-setting customer additions in the quarter, while Verizon FiOS customer additions were higher in fourth-quarter 2012 than in the prior two quarters, despite the impact of Superstorm Sandy," the company said.

Verizon Wireless added 2.2 million retail net connections in the quarter, including 2.1 million retail postpaid net connections.

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Retail churn was 1.24 percent versus 1.23 percent in the comparable period of last year.

Wireless operating income margin expanded to 24.0 percent from 23.7 percent.

At year-end 2012, the company said smartphones accounted for more than 58 percent of the Verizon Wireless retail postpaid customer phone base, up from 53 percent at the end of third quarter of 2012.

At the company's Wireline segment, consumer revenue grew 4.1 percent. The company added 144,000 net new FiOS Internet connections and 134,000 net new FiOS Video connections in the fourth quarter of 2012. 

In the third quarter, Verizon reported net income attributable to the company of $1.59 billion, up from $1.38 billion in the previous year. On a per share basis, earnings were 56 cents, higher than 49 cents a year-ago. Excluding items, it earned 64 cents a share. Operating revenue grew 3.9 percent to $29.01 billion.

The stock, which has been trading between $36.80 and $48.77 over the past year, closed Friday's regular trading at $42.54.

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