Verizon’s Revenue Stabilizes

Verizon Communications Inc. on Thursday reported stable sales and operating results for the fourth quarter, giving Wall Street something to smile about in the long-bedraggled telecommunications industry.

But the nation’s largest telephone company still lost $1.5 billion, or 53 cents a share, for the quarter, mainly because of a $2.9-billion charge to cover the expenses of 21,000 employees who took early retirement during the final three months of the year. The results contrast with earnings of $2.3 billion, or 83 cents a share, for the prior year’s final quarter.

Sales rose slightly to $17.3 billion from $17.2 billion.

Excluding one-time expenses, which totaled $3.1 billion, New York-based Verizon’s quarterly profit was $1.6 billion, or 58 cents a share.

Verizon executives said that revenue should grow modestly this year and spending on capital improvements should rise by as much as $1 billion, primarily to improve its wireless products. The company spent $11.9 billion overall last year.

“Some of our plans will begin to generate financial results this year,” Chief Executive Ivan Seidenberg said. “Other plans, especially our new infrastructure investments, will produce results over the long term.”

Verizon rode its industry-leading Verizon Wireless operation to bigger gains, handled its cash well and managed the downturn in local land-line service better than other Baby Bells, said analyst Kevin Calabrese of Argus Research in New York.

Verizon, formed by the 2000 merger of Bell Atlantic Corp. and GTE Corp., is the dominant local phone company in 13 states and the District of Columbia. Through GTE, it also serves parts of 16 other states, including California. Its affluent Southern California territory of beach communities helps make the state Verizon’s fourth-largest operation.

Verizon Wireless, which serves customers nationwide, added 1.5 million new subscribers in the fourth quarter, more than any other wireless company and 54% more than in the previous year’s final quarter.

“The reason they’re No. 1 is because they have arguably the best wireless network out there,” said analyst Jim Breen of Thomas Weisel Partners in New York. Aggressive bundling of local, long-distance, DSL and wireless services also has helped the phone company retain customers and add new ones.

For the year, Verizon earned $3.1 billion, or $1.11 a share, a 24% drop from 2002 earnings of $4.1 billion, or $1.49 a share. Annual sales rose slightly to $67.8 billion from $67.3 billion.

Verizon shares rose 33 cents Thursday to close at $37.09 on the New York Stock Exchange.