Citing continued strong sales of wireless, long-distance, DSL and bundled product offerings, Verizon Communications reported Q4 operating revenues of $17.2 billion, a 1.5% increase year-over-year. Reported earnings were $2.3 billion, or $0.83 per share. Nearly $1.2 billion in gains, primarily associated with $1.1 billion in tax benefits, were largely offset by after-tax charges totaling $1.1 billion, including $604 million primarily for pension and benefit costs related to prior force reductions, $292 million for costs related to the bankruptcy of Genuity, $129 million for merger transition costs, and $42 million in other items. Some other highlights:
- Free cash flow improved by $7.8 billion for the year, aided by improved cash from operations and by reductions in capital expenditures, which totaled $12.0 billion in 2002 compared to $17.4 billion in 2001.
- Verizon's telecom revenues were $10.0 billion in Q4, a 2.6% decrease compared to a year earlier. Wholesale services revenue represented the largest percentage decrease (down 7.6%) followed by business service revenue (down 6.9%), while consumer services revenue increased (up 2.0%).
- Data services revenues grew to more than $1.85 billion in the quarter, driven by data transport services that increased nearly 7% for the quarter compared to same period last year, and 9.2% for the full year. Annual data revenue reached nearly $7.3 billion.
- Verizon Wireless added 964,000 net customers in Q4, giving it a total of 32.5 million.
- In long distance voice, Verizon added 566,000 net customers in Q4, ending the year with 10.4 million customers.
- In DSL, Verizon added 148,000 net customers in Q4, ending the year with 1.79 million customers. A total of 62% of Verizon lines are now qualified for DSL. In Q4, Verizon deployed DSL to 250 remote terminals. The company said it would expand the remote terminal installations this year.
Verizon said UNE-P competition was having a negative effect on its business. The number of UNE-P lines provided to competitors increased by 470,000 in Q4 to a total of 3,186,000. The majority of these lines are in Pennsylvania, New York and New Jersey. Resale lines provided to competitors decreased slightly to 1,049,000. - For 2002, Verizon's total debt was reduced by $10.2 billion to $54.1 billion, a 15.9% decrease.
Verizon Wireless withdrew plans for an IPO - Revenue growth: 0 to 2%
- EPS: $2.70 to $2.80
- CAPEX (including software): $12.5 to $13.5 billion
- Net debt: $49 to $51 billion
2003 Guidance, in brief, included the following:
