The largest U.S. cellular network by subscribers reported fourth quarter profit of $5.07 billion on revenue of $31.07 billion. Non-GAAP earnings per share stood at 66 cents, up 73 percent year-over-year (statement).
Verizon's net income for the fourth quarter was $7.92 billion, but $2.85 billion goes to Vodafone for its 45 percent stake in Verizon Wireless. Verizon has bought out Vodafone's stake and the deal should close shortly. When that deal closes, Verizon's accounting quirks will go away.
Wall Street was looking for 65 cents per share on revenue of $31.02 billion.
For the full year, Verizon reported non-GAAP earnings per share of $2.48, an increase of one-quarter year-over-year.
The company, which in the year-ago quarter suffered a financial blip as a result of Hurricane Sandy, recovered more than 14 months after the storm battered the U.S. east coast, taking down vital infrastructure in major metropolitan areas including New York City. The cellular and landline giant posted a $1.93 billion loss in part as a result of the superstorm.
Verizon chairman and chief executive Lowell McAdam said in prepared remarks that the company returned almost 19 percent back to its shareholders during the year while improving its financial performance.
Across the company's entire business, from wireless to fiber broadband and enterprise services, Verizon saw a 4.1 percent year-over-year increase in its full-year 2013 operating revenues, totaling $120.6 billion.
For Verizon Wireless, the company's bread and butter, revenues were up 5.7 percent year-over-year in the fourth quarter — despite increasing pressure from rivals, notably T-Mobile — to $21.1 billion.
By the numbers:
With 1.7 million new retail cellular net connections, Verizon now has 102.8 million cellular users.
Adding 625,000 new tablet users, Verizon's total tablet base now stands at 3.6 million customers
87 percent of all devices activated were phones; 8.8 million smartphones activated during the fourth quarter
A total of 69 percent of all data traffic currently flows through the company's 4G LTE network
Verizon saw a 2.3 percent growth in its data center, cloud, and security enterprise unit
Pacific Crest analyst Michael Bowen warned in a Monday research note on the growing threat from T-Mobile, whose chief executive appears hellbent on not least shaking up but also "transforming" the wireless industry:
While T-Mobile has begun to affect both AT&T and Sprint's results, as exhibited in our recent survey work, Verizon's wireless porting ratios have not been affected materially yet as T-Mobile has been extracting more subscriber defections from Sprint and AT&T. However, we do not believe that Verizon will remain completely untouched by T-Mobile's likely successes in adding subscribers during 2014.
For the fourth quarter in fiber internet (FiOS), Verizon added 126,000 net new customers and 92,000 net new video connections, totaling 11.4 high-speed customers. The company also said it has been investing in replacing high-maintenance portions of its home copper network with fiber optics to provide better services and to reduce ongoing repair costs.
In its enterprise division, the newly-named Verizon Enterprise Solutions is continuing to increase and constitute a larger percentage of the company's overall revenue base.
Looking ahead to the first quarter of 2014, Wall Street expects earnings of 86 cents a share on revenue of $30.8 billion.
Corrected at 10:35 a.m. ET: with Vodafone amendments.