US operator Verizon reported fourth-quarter earnings of 93 cents a share, up from 22 cents a year earlier. Results were helped by one-time gains of 50 cents per share for pension fund adjustments, offset by 6 cents for lay-off charges and 5 cents for costs of the Alltel takeover. In the fourth quarter of 2009, Verizon also had 22 cents a share in one-time charges. The operator's quarterly revenues were down 2.6 percent year-on-year to USD 26.4 billion, hurt by the sale of some fixed-line operations and continued weakness in wireline services. Wireline revenues fell 2.8 percent to USD 10.3 billion, while Verizon Wireless increased sales 5.7 percent to USD 16.1 billion. For 2011, Verizon forecast adjusted EPS up 5-8 percent from USD 2.08 in 2010.
The mobile unit added a net 955,000 new customers in the quarter, including 803,000 retail subscribers and 152,000 from resellers, for a total 94.1 million at the end of 2010. Other connections, from M2M and telematics, rose by 182,000 in the quarter to 8.1 million. Data service revenues from retail customers rose 22.8 percent year-on-year, helping ARPU for the core customer base increase 2.4 percent to USD 51.84. Over a quarter (26%) of Verizon's postpaid retail customers had smartphones at the end of 2010. This helped the operating margin for wireless increase 340 basis points year-on-year, to 30.1 percent.
The wireline operating margin was at just 2.5 percent, versus 2.4 a year ago, but Verizon said it was optimistic about further expansion. Improvement has been led by staff cuts, with 16,000 positions eliminated in the past year, as well as growth in the consumer market, where quarterly revenues rose 1.6 percent and ARPU was up 10.7 percent to USD 88.85. The Fios fibre service now accounts for 53 percent of consumer revenues. It grew to 4.1 million internet customers and 3.5 million TV subscribers at end-2010, after net additions of respectively 197,000 and 182,000 in Q4. ARPU for Fios customers was more than USD 146, and the services were available to over 60 percent of Verizon's footprint, or 15.6 million premises at year-end. Verizon Business reported quarterly revenues of USD 4.0 billion, up 4.1 percent from a year ago thanks to growth in security, IT and networking services.
Verizon reported free cash flow for the full year 2010 of USD 16.9 million, up 16.4 percent from 2009. Capex fell by USD 400 million, to USD 16.5 billion.
