Verizon Posts Q4 Loss Despite Strong Wireless Performance
Efforts to streamline wireline costs and layoff-associated expenses drive Verizon Verizon into a fourth-quarter loss, but wireless and broadband growth remains strong.
Wireless and broadband growth remained strong for Verizon in the fourth
quarter, but the telecom giant still managed to post a net loss of $653
million. For the quarter, Verizon said it earned $27.1 billion in revenues, an
almost 10 percent jump from the fourth quarter of 2008.
Verizon blamed the fourth-quarter loss on consolidating Verizon's and newly acquired AllTel's revenue for the fourth quarter of 2008 and efforts to streamline the company's wireline operations. Most of the losses were layoff-associated costs.
"Our fourth-quarter earnings reflect costs to resize and simplify our wireline business," Chairman and CEO Ivan Seidenberg said. "This transformation is realigning our wireline cost structure, improving productivity and focusing resources on sales of FIOS and strategic business services."
Verizon Wireless added 1.2 million retail net customers in the quarter and 4.6 million retail net customers in the full year, both excluding acquisitions and adjustments. Retail postpaid churn and total retail churn remained low, at 1.06 percent and 1.44 percent, respectively. Total churn was 1.42 percent.
The company also added approximately 153,000 new FIOS broadband customers and 153,000 new FIOS television customers. Total FIOS broadband customers now total 3.4 million, while FIOS television customers stand at 2.9 million customers. Broadband and video revenue for the fourth quarter was $1.7 billion, up 25.5 percent from the fourth quarter of 2008.
Data revenue of $16.0 billion for the full year was up 31 percent over 2008 on a pro forma basis. In the fourth quarter, data revenue was 31.9 percent of all service revenues, up from 26.5 percent in the fourth quarter 2008 on a pro forma basis.
"In last year's turbulent economy, we took significant steps to strengthen Verizon going forward," said Seidenberg. "We focused on expanding wireless data and set the stage to deploy a nationwide 4G network later this year. We also expanded the scale of FIOS and our global IP network. We saw growth in all these areas in 2009, and we expect continued growth in 2010 and beyond, with a goal of delivering long-term shareowner value."