Verizon Expects Huge Impact on 4Q Earnings Due to Hurricane Sandy

Verizon Expects Huge Impact on 4Q Earnings Due to Hurricane Sandy
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Verizon Communications Inc. (NYSE:VZ) is working hard to restore the Internet, telephone, and TV services for consumers affected by  hurricane Sandy as soon as possible. The company is still pumping water out of its headquarters in New York. According  to a representative from Verizon, the “worst-case-scenario” is two weeks.

Verizon Expects Huge Impact on 4Q Earnings Due to Hurricane Sandy

Verizon Communications Inc. (NYSE:VZ) deployed 6,000 technicians in the New York and New Jersey areas, and they are making progress in repairing the infrastructures of the company. According to the representative, more technicians will be added soon, since most of the repairs in the other states are almost finished.

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Based on the latest filing of the company with the Securities and Exchange Commission, Verizon indicated that the repair work caused by the super storm has a significant effect on its earnings in the fourth quarter. According to the company, hurricane Sandy damaged a large part of its wireless and wire line businesses in the Northeast.

The statement of the company in the filing reads, “Verizon Communications Inc. (NYSE:VZ) is currently directing its resources toward significant remediation efforts to restore communications services to affected customers, which may take some time. It is not possible at this time to estimate the impact that the storm and the required remediation may have on Verizon’s operating results for the fourth quarter of 2012, but we expect that it could be significant.”

According to the Verizon Communications Inc. (NYSE:VZ), 96 percent of its towers in the areas affected by hurricane Sandy are now operational, but the repairs for the remaining towers require a lot of work.

In a statement, Bob Mudge, president of Verizon’s consumer division, requested costumers to be patient. He said, “Unfortunately, the extent of the storm damage — including lingering power outages and inaccessible roadways — in harder-hit areas, like New Jersey and the New York City metro area, makes full restoration a marathon and not a sprint. We ask for customers’ patience and understanding.”

According to Julius Genachowski, chairman of the Federal Communications Commission (FCC), 19 percent of the cell sites located in primary areas in 158 counties, across 10 states are not yet working. The FCC chairman said wireless operators still have a lot of restoration to do.

Among the three major wireless telecommunications providers in the country, Sprint Nextel Corporation (NYSE:S) suffered the biggest damage. According to the company, its network in New York, New Jersey, and Connecticut is only 80 percent operational. Only 75 percent of its towers in New York City are working properly. Its networks in the states of Massachusetts, New Hampshire, Pennsylvania, and Rhode Island are 90 percent operational.

Meanwhile, AT&T Inc. (NYSE:T) said, a majority of its towers are back to normal. The company continues its restoration efforts in areas that were hit by the storm.

AT&T Inc. (NYSE:T) and T-Mobile allowed customers to roam on each other’s network without charging any fees to consumers located in areas affected by the hurricane.

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