Verizon Feels Joy, Pain of iPhone Sales
Wednesday, January 25th, 2012Verizon Communications posted a $2 billion loss in the fourth quarter — on pension charges. But Verizon’s core business is performing well even as it works through the early stages of iPhone subsidies.
Verizon generated strong cash flows in the fourth quarter, posting a company record 7.7 percent year-over-year quarterly revenue growth. In total, Verizon reported $18.3 billion in total fourth-quarter revenues, up 13 percent from the year-ago period.
Much of Verizon’s growth can be attributed to the iPhone. Verizon sold 4.2 million units of Apple’s iPhone 4S since it made its market debut last October. Verizon didn’t see the full benefit of those sales, though, because of the high subsidies it pays to compel customers to sign a two-year contract on the iconic device.
Data Revenues Rising
“Verizon finished 2011 very strong, both in terms of revenue growth and by delivering an 18.2 percent total return to our shareholders for the full year, and the company has great momentum for 2012,” said Lowell McAdam, Verizon chairman, president and CEO. “Verizon Wireless produced particularly strong growth in the fourth quarter. While that diluted wireless margins in the short term, it is good news for revenue and margin growth over the long term, particularly given our leadership in the rapidly developing 4G LTE ecosystem.”
Driven by the rise of smartphone adoption, Verizon posted data revenues of $6.3 billion, up 19.2 percent. That represents 41.6 percent of service revenues. Verizon boasted 201,000 FiOS Internet and 194,000 FiOS Video net additions. Total service revenues climbed to $15.1 billion, up 6.4 percent. Verizon also posted 1.5 million net new subscribers, its largest increase in three years.
“Wireline margins recovered from third-quarter pressures, and we expect wireline margin expansion in 2012,” McAdams said. “With recent strategic moves and our investments in FiOS, LTE, and global IP and cloud-based strategic…
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