Verizon Communications Inc. (NYSE:VZ) shares are down in premarket trades after the company reported losses of $1.48 per share for its fourth quarter. The company blamed those losses mostly on the costs associated with employee benefits. In its third quarter, Verizon Communications Inc. (NYSE:VZ) reported a 16 percent increase in profits for the quarter.
For its fourth quarter, the company reported earnings per share of 38 cents per share. A Thomson Reuters consensus indicated that the company had been expected to report 52 cents per share on revenue of $29.7 billion. Verizon Communications Inc. (NYSE:VZ) said its losses were due to non-operational items related partially due to the effects of Hurricane Sandy, but mostly to a charge of $1.55 per share for benefit costs, pensions, severance and other employee benefits.
The news in Verizon Communications Inc. (NYSE:VZ)’s fourth quarter earnings report isn’t all bad. According to CNBC, the company reported 134,000 new FiOS internet connections during the quarter, which brings its total to 5.4 million Internet connections and 4.7 million video connections through FiOS. That’s a 12.6 percent growth in FiOS Internet connections and 13.3 percent in FiOS video connections.
Analysts at Deutsche Bank weighed in on the company’s report on paid television subscriptions and FiOS connections. Revenue for that sector of the company was $2.565 billion, an increase of 15.7 percent year over year, compared with the 18 percent the quarter before. The results were in-line with management’s lowered expectations due to the effects of Hurricane Sandy. Deutsche Bank analysts say this is good news because it shows that Verizon’s paid television business “remains stable, if not improving.”
Verizon Communication Inc. (NYSE:VZ)’s operating margin increased to 24 percent during the quarter. That’s good news because mobile phone carriers are facing pressures on their margins because of increasing costs. Verizon’s revenue for wireless services rose to $16.4 billion, an increase of 8.5 percent.
Verizon reported $16.2 billion in capital spending for 2012, mostly related to upgrades to its network as more and more consumers demand additional mobile web services and video streaming capabilities.