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Verizon posts $1.93-billion loss on pension liabilities, superstorm

A woman talking on her cell phone walks past a Verizon store in Manhattan.


U.S. telecommunications group Verizon Communications Inc posted a $1.93-billion (U.S.) quarterly loss on pension liabilities and superstorm Sandy-related charges that took the shine off a jump wireless business revenue.

Shares of the company fell more than 2 per cent to $41.55 in trading before the bell.

Operating margin at the telephone company's wireless business, which accounts two-thirds of total revenue, rose slightly to 24 per cent.

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Verizon and other mobile services providers subsidize smartphones for new customers and as a result are facing margin pressure due to rising costs.

Wireless services revenue for the fourth quarter grew 8.5 per cent to $16.4-billion, while retail service revenue jumped 8.4 per cent to $15.8-billion.

Verizon Wireless, the company's mobile venture with Vodafone Group Plc, is the biggest U.S. mobile service provider.

Verizon Wireless said in November it would pay a total dividend of $8.5-billion to its two parent companies.

Capital spending for the year was $16.2-billion, including $135-million related to Sandy recovery efforts, and was in line with 2011 spending.

Like rivals AT&T Inc and Sprint Nextel Corp, Verizon is spending billions of dollars to upgrade its network to support booming demand for services like web surfing and video on smartphones like Apple Inc's iPhone.

Verizon Communications reported a loss of $1.48 per share, compared with a loss of 71 cents per share a year earlier, when it posted a loss of about $212-million.

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Excluding one-time items, Verizon reported a profit of 38 cents per share.

Revenue rose 4.5 per cent to $30.05-billion.

Analysts expected a profit of 50 cents per share and revenue of $29.83-billion, according to Thomson Reuters I/B/E/S.

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