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grant_gross
Senior Editor

Verizon Posts Loss Due to Severance Costs

News
Jul 23, 20102 mins
Build AutomationEnterpriseTechnology Industry

Verizon Communications reported a net loss of US$198 million in the second quarter of 2010, down from net income of $1.5 billion in the second quarter of 2009, with the drop due to one-time charges, including a voluntary employee buy-out program.

Verizon Communications reported a net loss of US$198 million in the second quarter of 2010, down from net income of $1.5 billion in the second quarter of 2009, with the drop due to one-time charges, including a voluntary employee buy-out program.

Verizon reported revenue of $26.8 billion for the quarter, down slightly from $26.9 billion in the second quarter of 2009.

The telecom carrier’s quarterly results included a one-time charge of $2.3 billion for an employee reduction program that the company expects to lead to 11,000 voluntary reductions this year, Verizon said.

The buy-out program and other one-time costs, including charges related to a spin-off of rural lines in 14 states to Frontier Communications, totalled $0.65 a share, leading to a $0.07 loss per share for the quarter. Excluding one-time items, earnings per share was $0.58, beating analyst estimates of $0.56 per share, as polled by Thomson Reuters.

Verizon officials trumpeted gains in their mobile and Fios broadband divisions as cause for optimism.

“We see the opportunity to create additional shareholder value with a revenue portfolio that is now more heavily focused on wireless, Fios and global IP,” Chairman and CEO Ivan Seidenberg said in a statement. “Our cost-reduction efforts are gaining momentum, and trends in the global business market are showing signs of stabilization.”

Verizon’s wireless business reported operating income of $4.8 billion for the quarter, up from $4.5 billion in the second quarter of 2009. The company gained 1.4 million new mobile customers during the quarter, adding up to 92.1 million mobile customers.

Wireless revenue was $16 billion, up from $15.5 billion in the second quarter of 2009.

The company added 196,000 Fios broadband customers and 174,000 Fios television customers during the quarter. Verizon now has 3.8 million Fios broadband customers and 3.2 million Fios TV customers.

Wireline operating income was $214 million for the quarter, down from $555 million in the second quarter of 2009. Wireline revenue remained steady at $4.6 billion.

“We continue to do a good job in our key focus areas,” said John Killian, Verizon’s CFO.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantusG. Grant’s e-mail address is grant_gross@idg.com.