The United State’s second largest telecommunications company, Verizon Communications, announced that fourth quarter profits were up 3.9% for October through December of 2007. The perceived economic slowdown in America hasn’t hurt company growth, with the exception of a marginal increase in nonpaying wireless subscribers.
“We have not seen a change in our sales expectation through January,” said Chief Financial Officer Doreen Toben.
Verizon made $1.07 billion, or 37 cents per share in the fourth quarter, compared to $1.03 billion, or 35 cents per share, a year earlier. Excluding charges, the latest earnings would have been 62 cents per share. The charges include severance costs related to layoffs. The company cut 4,000 employees in the fourth quarter and expects to cut 5,000 more from the wireline division in 2008. Verizon has been cutting its wireline employees, which ended the year at 161,000.
“We have been rapidly shifting our force to the growing pieces of our business, that is FiOS and our wireless business, so both of those will continue to grow in force,” said Chief Operating Officer Denny Strigl.
Verizon’s wireless department continues to play second to AT&T in gaining new customers. Verizon added 2 million subscribers in the quarter for a total of 65.7 million. AT&T’s fourth quarter saw an increase of 4.4 million subscribers for a total of 70.1 million.
Verizon Wireless’s revenues were $9.87 billion, up from $8.68 billion a year ago. Wireless money continues to be an ever increasing share of Verizon’s overall sales. Operating income in the business was $3.0 billion, up from $2.5 billion, as Verizon Wireless managed to increase its operating margin by 1.2% to 26.2%.
In all four quarters of 2007, Verizon earned $5.5 billion, or $1.90 a share, on $95.5 billion in revenue. This is in comparison to a profit of $6.2 billion, or $2.12 a share, of $88.2 billion in revenue the year before.