Verizon Communications reported Q4 revenues of $19.3 billion and earnings of $1.7 billion, or 59 cents per diluted share, highlighted by an industry-record quarterly total for net new wireline broadband connections, as well as continued record growth and sustained margins at Verizon Wireless.
The earnings were down compared with $3.0 billion, or $1.08 per share, in the fourth quarter 2004.
Highlights for the quarter include:
- Verizon’s wireline business segment added a net of 613,000 wireline broadband connections (DSL and FiOS), giving the company a total of 5.1 million wireline broadband connections at year’s end.
- The FiOS FTTP rollout now passes a cumulative 3 million homes and businesses in 16 states. In markets where Verizon has been selling FiOS data services for at least nine months, the average penetration rate at the nine-month mark was 14 percent. Market penetration in Keller, Texas — Verizon’s first video market — is 21 percent in four months.
- Operating revenues on a comparable basis at Domestic Telecom were $9.4 billion in the fourth quarter 2005, a 1.8 percent decrease compared with the fourth quarter 2004.
- Revenues from DSL and FiOS data contributed to total wireline data revenues of $2.2 billion in the fourth quarter 2005, a 9.0 percent increase compared with the fourth quarter 2004.
- Verizon’s total customer connections (wireline switched access, wireless customers, and wireline and wireless customers using broadband connections (EV-DO, DSL or FiOS) — increased to 105.3 million at the end of the fourth quarter 2005. This is an increase of 5.7 percent compared with the fourth quarter 2004, and an increase of 1.8 million customer connections compared with the end of the third quarter 2005.
- Switched access lines totaled 48.8 million at the end of the fourth quarter 2005, a decline of 6.7 percent compared with the end of the fourth quarter 2004. This has been more than offset by increases of 47.6 percent in wireline broadband connections and 17.2 percent in total wireless customers over the same period.
- Wholesale voice connections — which includes resale, Unbundled Network Element-Platform (UNE-P) and end-to-end wholesale voice services provided under commercial agreements — totaled 5.5 million at the end of the fourth quarter 2005, down 16.1 percent from the end of the fourth quarter 2004.
- Verizon Wireless added more than 1.5 million customers, giving it a total of 51.3 million customers.
- Verizon Wireless total churn was 1.2 percent for the fourth quarter 2005 (matching the company’s previous quarterly record) and 1.3 percent for the year.
- Verizon Wireless revenues were $8.7 billion in the fourth quarter 2005, an 18.3 percent increase compared with $7.3 billion in the fourth quarter 2004
- In 2006, Verizon expects that net pension and OPEB costs will reduce earnings by 34 cents to 36 cents per share.
- 2006 CAPEX, including MCI, is expected to be from $17.0 billion to $17.4 billion.
- Network savings represent nearly half of the synergies, as bringing traffic onto Verizon’s networks is expected to save more than $200 million in 2006. Workforce reductions and information technology savings each represent about 20 percent of the synergy totals.
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