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Verizon leads wireless industry, but still racks up record losses in fourth quarter

NEW YORK — Verizon strengthened its position as the top dog of the wireless industry in the fourth quarter by raking in new subscribers and selling millions of Apple iPhones, but also posted a record loss.

The loss of $4.23 billion was mainly due to adjustments to the value of its pension funds and obligations, an annual routine for Verizon Communications Inc.

But even excluding the pension effects and the cost of repairing after Hurricane Sandy, the New York-based phone company missed Wall Street's earnings expectations, apparently because it attributed an unusually large amount of its profits to Vodafone Group, the British cellphone company that owns 45 percent of Verizon Wireless.

Verizon's loss for the October to December period compared with a loss of $2.02 billion a year earlier.

Revenue rose 6 percent to $30.05 billion from $28.44 billion, beating analyst forecasts of $29.8 billion, as Verizon added a record net of 2.2 million devices to its contract-based wireless plans.

The bumper quarter was fueled by the launch of the iPhone 5 on Sept. 21. Verizon activated 3 million of those, and 6.2 million iPhones of all kinds, another record for the company. IPhones accounted for two out of three smartphones activated, also the highest figure ever for Verizon.

IPhone sales are not an immediate benefit to the company, as it sells them at a big loss. It recoups the money over the life of a two-year contract, but the blockbuster sales helped curb its fourth-quarter loss.

Verizon Wireless revenue climbed 9.5 percent to $20 billion. On the wired side, operating revenue continued its long slide, falling 1.5 percent to $10 billion as households kept canceling their landlines.

To compensate, Verizon added a net 144,000 Internet customers and 134,000 pay-TV customers to its FiOS fiber-optic service, bringing the company to a total of 5.4 million FiOS Internet and 4.7 million FiOS Video customers.

For the year, Verizon Communications earned $875 million down from $2.4 billion in 2011. Annual revenue increased to $115.85 billion from $110.88 billion.

Verizon's report marks the debut for telecommunications companies this earnings season. Rival AT&T Inc. reports on Thursday.

Other earnings

• Google's fourth-quarter earnings rose 7 percent to nearly $2.9 billion as online advertisers spent more money in pursuit of holiday shoppers. Revenue surged 36 percent from the previous year to $14.4 billion.

• IBM's fourth-quarter earnings grew 6 percent to $5.83 billion even as revenue was largely flat at $29.3 billion, as the company benefited from growing, lucrative software businesses such as Internet-based computing and data analytics.

• Johnson & Johnson's fourth-quarter net income rose to $2.57 billion from $218 million a year earlier on higher sales of prescription drugs and medical devices. However, consumer health product sales declined again and the company again pushed back its timeline for returning recalled products to stores.

• Chemical and biosciences company DuPont's fourth-quarter income fell to $111 million, down 70 percent from $373 million it earned a year earlier, on soft demand for a key industrial pigment and solar energy products, coupled with increased spending on growth initiatives.

• Delta Air Lines' fourth-quarter profit shrunk to $7 million from $425 million a year earlier, as flight cancellations from Hurricane Sandy cut $100 million from its fourth-quarter profit. Revenue rose 2 percent to $8.6 billion.

• Jacksonville-based railroad operator CSX's fourth-quarter net income dipped 3 percent to $443 million, partially due to continued weak coal demand.

Verizon leads wireless industry, but still racks up record losses in fourth quarter 01/22/13 [Last modified: Tuesday, January 22, 2013 8:19pm]
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