Verizon Quarterly Profits Beat Analyst Expectations
Published on: 21st Jan 2014
By: Ian Mansfield
USA based Verizon Communications has posted higher than expected earnings as the company was boosted by one off gains.
The company posted revenues in the fourth-quarter of last year that were up by 3.4% at USD31.1 billion, while net income jumped by nearly 74% to US$7.9 billion.
Fourth-quarter 2013 results included an after-tax gain of $3.7 billion primarily non-cash and related to the annual actuarial valuation of benefit plans and mark-to-market pension adjustments. This favorable accounting adjustment was partially offset by after-tax charges of USD540 million for transaction costs related to the acquisition of Vodafone Group's 45 percent interest in Verizon Wireless.
Assuming approval of Verizon and Vodafone shareholders later this month, the closing of the acquisition is planned for Feb. 21 and would be immediately accretive to earnings by about 10 percent.
Total wireless revenues for the final three months of 2013 were $21.1 billion, up 5.7 percent year over year. Service revenues in the quarter totaled $17.7 billion, up 8.0 percent year over year - marking the fifth consecutive quarter of at least 8 percent growth. Retail service revenues grew 7.5 percent year over year, to $17.0 billion.
Verizon Wireless added 1.7 million retail net connections in the fourth quarter, including 1.6 million retail postpaid net connections. The company added 4.1 million net retail postpaid connections in 2013.
At the end of 2013, the company had 102.8 million retail connections, a 4.7 percent increase year over year - including 96.8 million retail postpaid connections.
At year-end 2013, smartphones accounted for 70 percent of the Verizon Wireless retail postpaid customer phone base, up from 67 percent at the end of third-quarter 2013. As a consequence, the retail postpaid average revenue per account grew 7.1 percent over fourth-quarter 2012, to $157.21 per month.
Verizon Wireless has also substantially completed deployment of its 4G LTE network, covering more than 99 percent of its current 3G network footprint.