Verizon Blames Q2 Loss On Layoffs

Author:
Publish date:

New York -- Verizon Communications posted a $198 million loss in the second quarter and attributed the loss to the cost of buying out 11,000 employees.

The $198 million loss contrasts with a $1.5 billion gain in the same period last year. Verizon put the cost of the voluntary layoffs at $2.3 billion in pretax expenses. The buyouts, offered in May, included one-time $50,000 bonuses and beefier pension benefits for union workers.

Revenue for the three months ended June 30 declined 0.3 percent to $26.8 billion, from $26.9 billion in the same period last year.

Verizon's mobile revenue climbed 3.4 percent to $16 billion, with an operating margin of 30.3 percent. Verizon's wireless business added more than 1.4 million net new customers, with 665,000 under contract and more than 800,000 wholesale customers. In addition, average monthly spending by contract customers hit $51.56, up 0.9 percent, and monthly churn rate was 0.94 percent, a two-year low.

Total wireless subscribers reached 92.1 million, good for No. 1 market share in the U.S., despite a sell-off of about 2 million subscribers to AT&T and Atlantic Tele-Network during Q2 to satisfy regulatory requirements for last year's acquisition of Alltel Corp. AT&T is No. 2 with just over 91 million subscribers.

Revenue in Verizon's traditional landline business fell 3.3 percent to $11.1 billion in the quarter, and landline service subscribers continued to dwindle, hitting 17.4 million, down 11.4 percent from last year's period.

Verizon's FiOS TV service added 196,000 subscribers and now stands at 3.2 million in total.

The company plans to launch its 4G LTE (Long Term Evolution) network in 25 to 30 markets by the end of this year and said it will cover virtually all its current nationwide 3G footprint by the end of 2013.

Featured

Related Articles