Verizon posts slim revenue gains, but net income loss

Verizon Communications Inc. today reported that its revenue increased in the fourth quarter of 2009, driven by wireless and broadband growth, but the gains were slim after the company accounted for the operating results of AllTell, which Verizon acquired in January 2009.

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 reported revenue of $27.1 billion in the fourth quarter, up 9.9% 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%.

Verizon recorded a loss of 23 cents in diluted earnings per share, compared with a gain of 43 cents per share in the fourth quarter of 2008. Included in the loss was a $3 billion one-time charge related to workforce reductions. Adjusted earnings per share were 54 cents, compared to 61 cents in the fourth quarter of 2008.

The 54 cents 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% from 2008 on a reported basis and 1.5% on a pro forma basis.

The quarter's numbers reflect management's efforts to strengthen the company, Chairman and CEO Ivan Seidenberg said in a statement. "We expect continued growth in 2010 and beyond, with a goal of delivering long-term share owner value," he said.

Verizon has continued "streamlining" its traditional wireline operations so it can focus on its FiOS broadband and television service and other offerings, he added. Revenue from traditional phone service at large telecommunications carriers has been dropping for several years.

"Our fourth-quarter earnings reflect costs to resize 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. Its wireless revenue grew by 22.5% from the fourth quarter of 2008.

The company also added 153,000 FiOS broadband Internet customers and the same number of FiOS TV customers. Verizon now has 3.4 million FiOS Internet customers and 2.9 million FiOS TV customers. The company's broadband and video revenues for the fourth quarter totaled $1.7 billion, up 25.5% from the fourth quarter of 2008.

Copyright © 2010 IDG Communications, Inc.

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