Verizon Posts Loss On Charges, Adj. EPS Misses View

(RTTNews) - Telecom giant Verizon Communications Inc. (VZ) Thursday posted a loss for the fourth quarter, compared to a profit last year, hit by costs related to pension and severance. Adjusted earnings missed Wall Street expectations, even as revenues advanced nearly 7 percent from last year.

The company reported a loss of $2.15 billion or $0.54 per share, compared to a profit of $7.92 billion or $1.76 per share last year.

The results included significant non-operational items in both quarters, primarily related to the annual actuarial valuation of benefit plans and mark-to-market pension adjustments.

Results of the just concluded quarter included charges of $1.25 per share with $1.12 per share related to the company's year-end mark-to-market adjustment for pension and Other Post-Employment Benefits liabilities, as well as severance costs; and $0.13 per share related to the early retirement of debt and other costs.

Adjusted earnings per share were $0.71 in the recent quarter, while it totaled $0.66 last year. On average, 27 analysts polled by Thomson Reuters expected the company to report earnings per share of $0.72 for the quarter. Analysts' estimates typically exclude special items.

Quarterly operating revenues grew 6.8 percent to $33.19 billion from $31.07 billion last year. Analysts projected $32.69 billion in revenue for the quarter.

In the Wireless business, revenues climbed 11 percent to $23.4 billion. While Services revenues grew 2.8 percent, Retail service revenues grew 2.6 percent from last year. Retail postpaid average revenue per account or ARPA rose 1 percent to $158.82 per month.

Verizon Wireless added 2.1 million retail net connections during the quarter, up 25 percent from last year, including 2 million retail postpaid connections. Retail postpaid churn was 1.14 percent, up 18 basis points from last year.

In the Wireline business, revenue slipped 1.6 percent to $9.6 billion, and Consumer revenues grew over 4 percent from last year. The business added 145,000 net new FiOS Internet connections, a 15.1 percent increase from last year. Net new FiOS Video connections climbed 26.1 percent to 116,000.

Further, Verizon said new revenue streams from the Internet of Things and telematics totaled about $585 million in 2014, with an annual growth rate of more than 45 percent.

For 2015, Verizon sees consolidated revenue growth of at least 4 percent. The company expects sustained profitability with a consolidated adjusted EBITDA margin at a level consistent with full-year 2014 performance.

VZ, which rose 0.2 percent to $48.25 on Wednesday, slid around 1 percent in pre-market trading.