VERIZON Communications Inc, the second-largest United States phone company, said fourth-quarter profit rose 3.9 percent as wireless and television subscriptions increased.
Net income climbed to US$1.07 billion, or 37 cents a share, from US$1.03 billion, or 35 cents, a year ago, the New York-based company said yesterday in a PR Newswire statement. Sales rose 5.5 percent to US$23.8 billion, missing the US$24-billion average estimate of analysts in a Bloomberg News survey.
Verizon competes with cable-television providers such as Comcast Corp to sell packages of phone, TV and Web access. Chief Executive Officer Ivan Seidenberg is spending US$23 billion over seven years to build a fiber-optic network that can bring TV and high-speed Internet into people's homes.
"They've done really well at rolling out the service and adding customers," said Todd Rosenbluth, an equity analyst at Standard & Poor's in New York. He recommends holding the shares. "It's taking time, and it's costing money, but we still think it's the appropriate action to be taking."
Profit, excluding some items, was 62 cents, meeting the average estimate of 21 analysts in the Bloomberg survey.
Verizon fell 47 cents to US$37.76 last Friday in New York Stock Exchange composite trading. The shares are little changed in the past 12 months.
Seidenberg, 61, has been shedding businesses to focus on its fiber-optic network and wireless unit. Verizon is awaiting regulatory approval for a US$2.72 billion deal to hand over about 1.6 million phone lines in the northeast US to FairPoint Communications Inc.
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 Wireless, jointly owned by Verizon and Vodafone Group Plc, took subscribers from smaller rival Sprint Nextel Corp, which lost 683,000 contract customers last quarter. AT&T Inc, owner of the biggest US mobile-phone service, added 2.7 million users in the quarter, including 1.2 million on contracts.
After a 17-percent gain in 2007, Verizon shares have fallen 14 percent this year amid investor concerns about economic growth. While AT&T said a slowing economy cost it about 100,000 home-phone customers last quarter, Verizon hasn't detected a similar trend, company president Denny Strigl said earlier this month.
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 nine million last year.
AT&T, the largest US phone company, is spending US$7 billion over five years to revamp its network for television service. The San Antonio-based company is using a mix of fiber and copper wires to offer TV plans.