Verizon Communications Inc, the largest US telephone company, has announced a fourth-quarter loss after large charges related to the cost of cutting 10% of its workforce.
For the fourth quarter, New York-based Verizon’s loss totaled $1.46bn, compared with a profit of $2.29bn in the year-ago quarter. The loss included $3.1bn in one-time items, primarily associated with job cuts of more than 21,000 workers. Excluding those special items, Verizon earned $1.6bn in the quarter.
Revenue rose 0.7% to $17.28bn, mainly due to the growth in its wireless outfit Verizon Wireless. Wall Street analysts had expected Verizon to record revenue of $17.31bn. Revenue from the wireless unit rose 14.6% to $6.0bn. Data services revenue fell 26.3% to $1.0bn, while international revenue fell 13.1% to $477m.
The company cut total debt 14.8% to $45.4bn at the end of 2003, and said total capital expenditure fell to $11.9bn in full-year 2003 from $13.1bn in 2002.
The aggressive headcount reductions at Verizon reflect the tough conditions for fixed-line operators around the world. In the United States, competition has escalated, and revenues have declined as more and more customers switch to mobile phones and email. This has impacted on the number of traditional phone lines in service. Verizon lost 4.2% of its local-telephone access lines in the quarter, which in turn meant that core domestic telecom revenues fell 1.6% to $9.91bn.
During the fourth quarter Verizon Wireless added 1.5 million new subscribers as it benefited from the new rule that allows subscribers to keep their phone numbers when switching mobile carriers. Both Verizon Wireless and T-Mobile were the main winners in this regard, after T-Mobile said it had added about one million subscribers in the fourth quarter. Cingular Wireless added 628,000, Sprint about 391,000, and AT&T Wireless 128,000. Nextel plans to release its figures in February, although earlier this year it said it would add at least 2.2 million subscribers in full year 2003.
This article is based on material originally published by ComputerWire