Verizon Communications reported a significant loss for the fourth quarter. The company reported a loss of $4.22 billion, or $1.48 a share, in the fourth quarter. This was more than double the loss a year ago. Revenue increased to $30.05 billion, a 5.7% increase from a year ago. This was slightly higher than analysts’ estimates.
The impact of Hurricane Sandy and pension costs had a devastating effect on the company’s quarterly earnings. Damage from the hurricane created a loss of $0.07 a share, and pension charges caused an earnings drop of $1.55 a share. Excluding the charges from the hurricane and pension costs, the company would have earned $0.45 a share. This was lower than the $0.50 predicted by analysts.
The November hurricane knocked out wireless service for all of the big carriers in the Northeast, but Verizon, which is based in New York, was the hardest carrier hit. Verizon’s central offices in Lower Manhattan, Queens and Long Island, were flooded by the storm surge, causing power failures that disrupted a large portion of its old landline services in those areas. It took about a week for the company to restore most of its services.
Francis J. Shammo, chief financial officer of Verizon, said, “Sandy had a dramatic effect, particularly on the wire line business, due to the heavy concentration of damage in the New York metropolitan area. Our challenge was to restore service to customers as quickly as possible, while still managing to meet the demand for new services.”
Verizon’s wireless business had a strong quarter. The company is still adding plenty of customers and selling a lot of cellphones. The company sold 9.8 million smartphones in the fourth quarter, compared with 7.7 million during the same quarter last year. 2.1 million contract subscribers, the most valuable type of customer, were added to the company’s rolls, versus 1.2 million a year ago.
In the fourth quarter, Verizon’s top-selling smartphone was the iPhone. 6.2 million iPhones were sold, and nearly 50% of those sold were of the latest model of the phone, the iPhone 5. A majority of Verizon’s remaining smartphone sales were made up of Android phones, while sales of Windows phones showed steady, but slow, growth.