Net income climbed to $1.07 billion, or 37 cents a share, from $1.03 billion, or 35 cents, a year ago, the New York-based company said today in a statement. Sales rose 5.5 percent to $23.8 billion, below the $24 billion average estimate of analysts in a Bloomberg survey.
Chief Executive Officer Ivan Seidenberg is spending $23 billion over seven years to offer TV service and higher Internet speeds, to compete with cable companies that sell phone plans. Verizon lost 875,000 phone lines in the quarter, an 8.1 percent drop from a year ago, compared with an 8 percent decline in the previous quarter.
``Line losses accelerated again,'' said Todd Rosenbluth, an equity analyst at Standard & Poor's in New York. ``That's a trend we expected, given cable competition.'' He recommends holding the shares.
Profit excluding items such as severance pay for fired workers was 62 cents a share, meeting the average estimate of 21 analysts in the Bloomberg survey. The wireless unit's operating margin, the percentage of sales remaining after deducting the costs of providing the service, expanded to 26.2 percent from 25 percent a year ago.
Verizon fell $1.02, or 2.7 percent, to $36.74 at 9:37 a.m. in New York Stock Exchange composite trading. The stock was little changed in the 12 months before today.
Job Cuts
The company said it began cutting jobs in the fourth quarter and plans to continue firing workers this year. Spokesman Bob Varettoni declined to say how many positions the company will eliminate.
Verizon's larger rival, AT&T Inc., also reported fourth- quarter revenue that fell short of analysts' estimates. While AT&T blamed the results on shutting off service to nonpaying customers, Verizon pointed to competition from cable companies such as Comcast Corp.
Seidenberg, 61, has been shedding businesses to focus on Verizon's fiber-optic network and wireless unit. Verizon is awaiting regulatory approval for a $2.72 billion deal to hand over about 1.6 million phone lines in the northeastern U.S. to FairPoint Communications Inc.
Spinoff, Sale
Fourth-quarter results last year included expenses of 22 cents a share for taxes on the sale of assets in the Dominican Republic and the cost of spinning off a directories unit.
Verizon added 226,000 TV subscribers to its fiber-optic network, less than the 234,000 projected by UBS AG analyst John Hodulik in New York. The company also recruited 245,000 fiber Internet customers, missing Hodulik's 284,000 estimate.
The fiber-optic network, called FiOS, is available in parts of 16 states. Verizon plans to make it available to 18 million homes by the end of 2010, up from about 9 million last year.
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