May 29, 2020

Verizon Posts Loss on Pension Charges

Verizon Communications reported a net loss of $212 million in the fourth quarter of 2011, despite rising iPhone sales, compared with net income of $4.7 billion in the same quarter a year ago, the company said Tuesday.

The loss was primarily because of the impact of previously announced noncash pension charges, the company said.

The company said that revenue climbed 7.7 percent, to $28.4 billion in the quarter, from $26.4 billion in the same quarter a year earlier.

Adjusted for the pension charges, the per-share income was 52 cents, just below the expectations of Wall Street analysts of 53 cents a share. Revenue was right in line with forecasts, according to a survey of analysts by Thomson Reuters.

“Verizon finished 2011 very strong, both in terms of revenue growth and by delivering an 18.2 percent total return to our shareholders for the full year, and the company has great momentum for 2012,” said Lowell McAdam, Verizon’s chief executive, in a statement.

The company, based in New York, said that it sold 4.2 million units of Apple’s iPhone 4S since its release in October.

However, profit margins dropped due to the high subsidies that Verizon must pay for each new iPhone purchased by customers when they commit to a two-year contract.

Wireless carriers subsidize a part of the retail price on most new cellphones in order to attract customers. However, the companies eventually recoup the costs over the duration of a phone’s two-year contract through monthly cellphone bills.

Verizon said this week that it had a large lead over its rival ATT in the race to build out a newer, faster network called 4G Long Term Evolution, or LTE. The company now has the LTE technology deployed in 195 markets, compared to ATT’s 26 markets.

Article source: http://feeds.nytimes.com/click.phdo?i=cbf38fc8b376196b6de72a75996d0d67