Verizon's wireless business continued to perform well in the fourth quarter, but the company reported a net loss as it took charges related to job cuts.
Verizon reported a fourth quarter net loss on a $3 billion charge related to layoffs. Excluding that charge, Verizon met Wall Street expectations.
In the fourth quarter (statement), Verizon reported a loss of 23 cents a share, or $653 million, compared to a profit of 43 cents a share a year ago. Adjusted for severance, pensions and other charges, Verizon had earnings of 54 cents, in line with Wall Street estimates.
Revenue for the fourth quarter was up 10 percent to $27.1 billion. Verizon's revenue got a boost from the acquisition of Alltel. For 2009, Verizon reported earnings of $1.29 a share on revenue of $107.8 billion.
In a statement, Verizon said that it transitioned away from a deteriorating wireline business to one focused on wireless and data revenue. For 2010, Verizon said it would spend $16.8 billion to $17.2 billion on capital spender. Earnings per share will fall 4 cents a share to 6 cents a share in 2010 from 2009 due to retiree benefit costs.
On a conference call, Verizon executives talked a lot about wireless. A few quick points:
- Executives noted that the company has seen some success porting customers over from AT&T. However, the company didn't break out any hard statistics. Verizon noted that it is more competitive in the smartphone market with the Droid and Palm Pre.
- Verizon said it was comfortable that its network and that it could hold up under the strain of data demand from smartphones. Executives noted that the iPhone is a good product that has changed the game for data consumption. Verizon has been modeling data usage on the Droid, Eris and Storm and the impact on its network.
- Verizon knows the limitations and executives feel that they are in front of the potential data limitations. Executives added that its roll-out of LTE technology will be able to support more data consumption.
By the numbers for the fourth quarter:
- Verizon Wireless added 1.2 retail net customers and 4.6 million for 2009. That tally is slightly better than expectations. The company ended the year with 87.5 million retail customers.
- Wireless retail postpaid churn was 1.06 percent. Total retail churn was 1.44 percent.
- Wireless average monthly service revenue per user, fell 2.2 percent year over year to $50.75.
- Verizon added 153,000 net new FiOS Internet customers. By the end of the quarter, Verizon had 3.4 million FiOS Internet customers.
- The company added 153,000 FiOS TV customers and ended the year with 2.9 million total TV subscribers. The TV additions appear to be below expectations, according to Barclays Capital.
- Total broadband and video revenue was $1.7 billion, up 25.5 percent from a year ago.